Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this broadens its network of institutional and operational partners, and enhances its ability to source and gain access to future investment prospects globally.
Keppel DC Reit and Keppel are collectively obtaining 90% reliable interests in 2 freehold, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Keppel DC Reit will certainly thus pay concerning JPY168.4 billion for its reliable interest in the two data centres.
Positioned in Inzai City, one of Japan’s the majority of established hyperscale data-centre clusters, the two totally matched, colocation assets are fully inhabited by four investment-grade internet business and IT services clients.
The weighted average rent expiration is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Three of the four investment-grade clients across the two Tokyo data centres are updated to the Reit’s portfolio, which widens its client base and reduces client focus risk.
The Reit will take an 88.62% stake in each data centre, whilst Keppel, with its interest in Keppel Japan KK, will hold a 1.38% efficient interest.
The total acquisition cost on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% discount to the assets’ valuation of JPY194 billion, stated the Reit manager in a Sept 1 bourse filing.
With the purchase, Japan’s contribution to the Reit’s portfolio rental income increases to about 23%, from 9% as at end-June this year.
Its manager plans to finance the purchase with a mix of equity and yen-denominated debt. The deal is expected to be finished in the 4th quarter of this year.
Keppel DC Reit said the procurement will increase its distribution each instantly while also providing multiple avenues of long-term revenue development. The assets benefit from contracted average annual rent growth of about 2.8%, and the in-place rents are approximated to be a minimum of 30% listed below dominating market rents.
On the other hand, the existing operator will keep a 10% stake in each asset, to guarantee “alignment of interests and working continuity”, the bourse filing said.
