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 while also offering numerous avenues of long-term revenue growth. The properties gain from acquired average annual lease escalation of about 2.8%, and the in-place leas are approximated to be at the very least 30% below prevailing market rents.
Three of the four investment-grade clients across the two Tokyo data centres are updated to the Reit’s portfolio, that expands its client base and reduces client focus risk.
The weighted average lease expiry is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Keppel DC Reit will certainly hence pay regarding JPY168.4 billion for its efficient interest in the two information centres.
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% efficient interest.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, claimed this increases its network of institutional and operational partners, and strengthens its ability to source and get access to future investment opportunities internationally.
Its manager plans to fund the acquisition with a mix of equity and yen-denominated debt. The deal is anticipated to be completed in the 4th quarter of this year.
The overall purchase rate 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 manager in a Sept 1 bourse declaring.
Keppel DC Reit and Keppel are collectively getting 90% reliable interests in two freehold, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Meanwhile, the existing operator is going to preserve a 10% stake in each asset, to guarantee “alignment of interests and operational continuity”, the bourse filing said.
Located in Inzai City, among Japan’s a lot of established hyperscale data-centre clusters, the two completely fitted, colocation assets are totally inhabited by four investment-grade internet business and IT services clients.
With the acquisition, Japan’s contribution to the Reit’s portfolio rental income enhances to about 23%, from 9% as at end-June this year.
