Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Three of the four investment-grade customers throughout both Tokyo data centres are updated to the Reit’s profile, that broadens its client base and minimizes client concentration risk.
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.
Positioned in Inzai City, among Japan’s the majority of established hyperscale data-centre clusters, both totally matched, colocation assets are fully occupied by four investment-grade internet business and IT services clients.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, stated this broadens its network of institutional and operational partners, and strengthens its capability to source and get access to future investment opportunities globally.
The Reit will take an 88.62% stake in each data center, while Keppel, with its interest in Keppel Japan KK, are going to hold a 1.38% reliable interest.
Keppel DC Reit will therefore pay regarding JPY168.4 billion for its effective rate of interest in the two information centres.
Meanwhile, the existing operator is going to keep a 10% risk in each asset, to ensure “alignment of interests and working continuity”, the bourse filing stated.
Keppel DC Reit and Keppel are collectively obtaining 90% effective interests in 2 freehold, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Keppel DC Reit said the purchase will increase its distribution per unit immediately whilst also providing numerous avenues of long-term earnings growth. The properties gain from contracted average annual lease growth of concerning 2.8%, and the in-place leas are approximated to be at the very least 30% listed below prevailing industry rents.
The weighted average lease expiration is approximately 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The total acquisition price on a 100% basis is JPY190 billion ($1.55 billion), that reaches a 2.1% discount rate to the assets’ valuation of JPY194 billion, stated the Reit manager in a Sept 1 bourse declaring.
Its manager plans to finance 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.
