Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
The overall purchase price on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount rate to the properties’ assessment of JPY194 billion, stated the Reit administrator in a Sept 1 bourse filing.
Keppel DC Reit said the acquisition will raise its distribution per unit instantly whilst also providing several avenues of long-term earnings growth. The properties benefit from contracted average annual rent growth of concerning 2.8%, and the in-place leas are approximated to be at least 30% listed below dominating market rents.
Three of the 4 investment-grade clients throughout both Tokyo information centres are new to the Reit’s portfolio, that expands its client base and decreases client concentration risk.
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Keppel DC Reit will certainly hence pay regarding JPY168.4 billion for its reliable rate of interest in the two information hubs.
Its manager plans to finance the procurement with a mix of equity and yen-denominated debt. The deal is anticipated to be completed in the 4th quarter of this year.
Established in Inzai City, one of Japan’s many established hyperscale data-centre clusters, both totally matched, colocation possessions are totally inhabited by four investment-grade internet venture and IT services clients.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, stated this increases its network of institutional and functional partners, and strengthens its ability to source and gain access to future investment possibilities internationally.
Keppel DC Reit and Keppel are collectively obtaining 90% reliable rate of interests in 2 freehold, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The weighted average rent expiry 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% stake in each data center, while Keppel, through its interest in Keppel Japan KK, are going to hold a 1.38% reliable interest.
At the same time, the existing operator will maintain a 10% risk in each asset, to assure “alignment of interests and working continuity”, the bourse filing said.
With the purchase, Japan’s contribution to the Reit’s account leasing income enhances to around 23%, from 9% as at end-June this year.
