Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Loh Hwee Long, CEO of the executive of Keppel DC Reit, stated this expands its network of institutional and functional partners, and enhances its capacity to source and get access to future investment opportunities globally.
At the same time, the existing operator is going to retain a 10% risk in each asset, to guarantee “positioning of interests and operational continuity”, the bourse filing stated.
Keppel DC Reit and Keppel are jointly obtaining 90% efficient interests in two property, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The Reit will take an 88.62% claim in each data center, while Keppel, with 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 reaches a 2.1% discount to the assets’ valuation of JPY194 billion, said the Reit supervisor in a Sept 1 bourse declaring.
Established in Inzai City, one of Japan’s most developed hyperscale data-centre clusters, the two completely fitted, colocation possessions are totally occupied by four investment-grade internet enterprise and IT services clients.
With the acquisition, Japan’s contribution to the Reit’s account rental income increases to about 23%, from 9% as at end-June this year.
Keppel DC Reit will thus pay concerning JPY168.4 billion for its efficient interest in the two data hubs.
Keppel DC Reit said the acquisition will raise its distribution each instantly whilst also offering numerous channels of long-term earnings development. The assets benefit from contracted average annual rent rise of concerning 2.8%, and the in-place rental fees are approximated to be at the very least 30% below dominating market rents.
The weighted average rent expiry is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
3 of the 4 investment-grade customers across both Tokyo data centres are updated to the Reit’s profile, that widens its client base and minimizes client concentration risk.
Its manager intends to finance the purchase with a mix of equity and yen-denominated debt. The deal is expected to be finished in the 4th quarter of this year.
