Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
The overall purchase rate on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount to the properties’ valuation of JPY194 billion, said the Reit supervisor in a Sept 1 bourse filing.
The Reit will take an 88.62% stake in each data center, whilst Keppel, through its interest in Keppel Japan KK, are going to hold a 1.38% effective interest.
Established in Inzai City, one of Japan’s many established hyperscale data-centre clusters, the two completely fitted, colocation properties are completely inhabited by four investment-grade internet business and IT services clients.
Three of the four investment-grade customers throughout the two Tokyo data facilities are updated to the Reit’s portfolio, which widens its client base and decreases 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 completed in the fourth quarter of this year.
Lentor Gardens Residences floor plan
With the acquisition, Japan’s contribution to the Reit’s account leasing income increases to around 23%, from 9% as at end-June this year.
The weighted average rent expiration is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
On the other hand, the existing operator will maintain a 10% risk in each asset, to assure “placement of interests and working continuity”, the bourse filing mentioned.
Keppel DC Reit said the purchase will raise its distribution per unit immediately while also providing several avenues of long-term earnings growth. The assets gain from contracted average annual rent growth of regarding 2.8%, and the in-place leas are estimated to be a minimum of 30% below prevailing market rents.
Keppel DC Reit will thus pay concerning JPY168.4 billion for its reliable rate of interest in both information hubs.
Keppel DC Reit and Keppel are collectively getting 90% efficient rate of interests in 2 property, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, claimed this expands its network of institutional and functional partners, and strengthens its ability to source and gain access to future investment prospects globally.
