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, said this expands its network of institutional and operational partners, and strengthens its capacity to source and access future investment possibilities internationally.
With the acquisition, Japan’s contribution to the Reit’s portfolio leasing income enhances to about 23%, from 9% as at end-June this year.
Keppel DC Reit will hence pay about JPY168.4 billion for its effective rate of interest in the two information hubs.
The overall acquisition rate on a 100% basis is JPY190 billion ($1.55 billion), that reaches a 2.1% discount to the properties’ valuation of JPY194 billion, said the Reit manager in a Sept 1 bourse declaring.
At the same time, the existing operator is going to maintain a 10% stake in each asset, to ensure “positioning of interests and working continuity”, the bourse filing stated.
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.
Three of the 4 investment-grade clients across both Tokyo data facilities are new to the Reit’s portfolio, that widens its client base and reduces client concentration risk.
Keppel DC Reit said the procurement will raise its distribution each immediately whilst also providing numerous channels of long-term income growth. The assets benefit from acquired average annual rent growth of concerning 2.8%, and the in-place rental fees are estimated to be a minimum of 30% listed below dominating industry rents.
The weighted average rent expiration is approximately 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Keppel DC Reit and Keppel are jointly obtaining 90% reliable interests in 2 freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
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.
Established in Inzai City, among Japan’s most established hyperscale data-centre clusters, the two totally fitted, colocation assets are completely inhabited by four investment-grade internet venture and IT companies clients.
