Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Located in Inzai City, among Japan’s many established hyperscale data-centre clusters, both completely fitted, colocation possessions are fully inhabited by four investment-grade internet business and IT companies clients.
Its manager intends to finance the acquisition with a mix of equity and yen-denominated debt. The deal is expected to be completed in the fourth quarter of this year.
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 total purchase cost on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% discount rate to the properties’ valuation of JPY194 billion, stated the Reit supervisor in a Sept 1 bourse filing.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this broadens its network of institutional and operational partners, and strengthens its ability to source and access future investment prospects globally.
Meanwhile, the existing operator is going to preserve a 10% stake in each asset, to guarantee “placement of interests and operational continuity”, the bourse filing said.
Three of the four investment-grade clients across the two Tokyo information centres are new to the Reit’s profile, which widens its client base and decreases client focus risk.
Keppel DC Reit and Keppel are jointly obtaining 90% efficient rate of interests in 2 property, hyperscale information centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The weighted average rent expiry is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The Reit will take an 88.62% claim in each data centre, while Keppel, with its interest in Keppel Japan KK, will hold a 1.38% effective interest.
Keppel DC Reit will thus pay concerning JPY168.4 billion for its reliable rate of interest in both information centres.
Keppel DC Reit said the procurement will increase its distribution each instantly whilst also providing several avenues of long-term revenue development. The assets benefit from contracted average annual rent escalation of about 2.8%, and the in-place rents are approximated to be at the very least 30% below prevailing market rents.
