Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Keppel DC Reit said the acquisition will increase its distribution per unit immediately whilst also providing several channels of long-term earnings development. The properties benefit from contracted average annual rent growth of regarding 2.8%, and the in-place rents are estimated to be at the very least 30% below dominating industry rents.
At the same time, the existing operator will preserve a 10% risk in each asset, to ensure “placement of interests and working continuity”, the bourse filing said.
Located in Inzai City, among Japan’s a lot of developed hyperscale data-centre clusters, both totally fitted, colocation assets are fully occupied by four investment-grade internet business and IT services clients.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this broadens its network of institutional and functional partners, and strengthens its capacity to source and access future investment prospects globally.
Keppel DC Reit and Keppel are jointly acquiring 90% effective interests in two property, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
With the acquisition, Japan’s contribution to the Reit’s account rental income enhances to about 23%, from 9% as at end-June this year.
The overall purchase price on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% discount to the assets’ valuation of JPY194 billion, said the Reit administrator in a Sept 1 bourse declaring.
Keppel DC Reit will certainly thus pay concerning JPY168.4 billion for its reliable interest in the two data centres.
The weighted average lease expiration is approximately 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The Reit will take an 88.62% claim in each data center, while Keppel, with its interest in Keppel Japan KK, will hold a 1.38% reliable interest.
3 of the four investment-grade clients throughout both Tokyo information facilities are updated to the Reit’s portfolio, that expands its client base and reduces client concentration risk.
Its manager prepares to fund the purchase with a mix of equity and yen-denominated debt. The deal is expected to be finished in the fourth quarter of this year.
