Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Keppel DC Reit will therefore pay about JPY168.4 billion for its reliable rate of interest in both information hubs.
With the purchase, Japan’s contribution to the Reit’s portfolio rental income enhances to about 23%, from 9% as at end-June this year.
At the same time, the existing operator is going to preserve a 10% stake in each asset, to guarantee “placement of interests and working continuity”, the bourse filing mentioned.
Located in Inzai City, among Japan’s many established hyperscale data-centre clusters, both totally matched, colocation properties are fully inhabited by four investment-grade internet venture and IT companies clients.
The overall acquisition price on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% discount rate to the assets’ assessment of JPY194 billion, said the Reit administrator in a Sept 1 bourse filing.
Keppel DC Reit said the purchase will raise its distribution each instantly whilst also providing several avenues of long-term revenue growth. The assets gain from contracted average annual lease escalation of concerning 2.8%, and the in-place leas are estimated to be a minimum of 30% below dominating industry rents.
The Reit will take an 88.62% claim in each data center, whilst Keppel, with its interest in Keppel Japan KK, will hold a 1.38% effective interest.
Keppel DC Reit and Keppel are jointly acquiring 90% effective interests in 2 property, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The weighted average rent expiration is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, said this broadens its network of institutional and operational partners, and strengthens its ability to source and access future investment opportunities globally.
3 of the four investment-grade customers throughout both Tokyo data centres are new to the Reit’s profile, which expands its client base and reduces client focus risk.
Its manager intends to fund the procurement with a mix of equity and yen-denominated debt. The deal is anticipated to be completed in the fourth quarter of this year.
