Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres

The Reit will take an 88.62% claim in each data center, while Keppel, through its interest in Keppel Japan KK, are going to hold a 1.38% efficient interest.

The complete purchase rate on a 100% basis is JPY190 billion ($1.55 billion), which is at a 2.1% price cut to the properties’ valuation of JPY194 billion, stated the Reit manager in a Sept 1 bourse filing.

Springleaf Residence Singapore

Established in Inzai City, one of Japan’s the majority of developed hyperscale data-centre clusters, both completely fitted, colocation assets are totally occupied by four investment-grade internet business and IT services clients.

The weighted average rent expiry 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 is going to maintain a 10% risk in each asset, to ensure “alignment of interests and working continuity”, the bourse filing said.

With the acquisition, Japan’s contribution to the Reit’s profile leasing income increases to around 23%, from 9% as at end-June this year.

Loh Hwee Long, CEO of the manager of Keppel DC Reit, stated this increases its network of institutional and functional partners, and strengthens its capability to source and get access to future investment possibilities internationally.

Keppel DC Reit said the procurement will raise its distribution per unit instantly whilst also offering several avenues of long-term income growth. The properties gain from acquired average annual rent growth of about 2.8%, and the in-place rents are approximated to be at least 30% listed below dominating market rents.

Keppel DC Reit will certainly thus pay concerning JPY168.4 billion for its efficient rate of interest in the two information hubs.

Keppel DC Reit and Keppel are collectively acquiring 90% effective interests in two property, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.

3 of the four investment-grade customers throughout the two Tokyo data facilities are new to the Reit’s profile, which broadens its client base and decreases client focus risk.

Its manager prepares to fund the procurement with a mix of equity and yen-denominated debt. The deal is expected to be completed in the fourth quarter of this year.