Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Keppel DC Reit will certainly thus pay regarding JPY168.4 billion for its reliable rate of interest in both information hubs.
The Reit will take an 88.62% claim in each data center, whilst Keppel, through its interest in Keppel Japan KK, will hold a 1.38% reliable interest.
Positioned in Inzai City, among Japan’s the majority of established hyperscale data-centre clusters, the two fully fitted, colocation assets are completely inhabited by four investment-grade internet enterprise and IT services clients.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, claimed this broadens its network of institutional and functional partners, and strengthens its capability to source and get access to future investment prospects internationally.
With the purchase, Japan’s contribution to the Reit’s profile leasing income increases to around 23%, from 9% as at end-June this year.
Keppel DC Reit and Keppel are jointly acquiring 90% reliable interests in two freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Its manager prepares to fund the procurement with a mix of equity and yen-denominated debt. The deal is anticipated to be finished in the fourth quarter of this year.
The total acquisition 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 administrator in a Sept 1 bourse filing.
Keppel DC Reit said the purchase will raise its distribution per unit immediately while also providing several channels of long-term revenue growth. The assets benefit from contracted average annual rent growth of regarding 2.8%, and the in-place rental fees are approximated to be a minimum of 30% listed below prevailing market rents.
Three of the 4 investment-grade clients throughout the two Tokyo data facilities are new to the Reit’s portfolio, which broadens its client base and decreases client focus risk.
Meanwhile, the existing operator will keep a 10% stake in each asset, to assure “placement of interests and working continuity”, the bourse filing said.
The weighted average lease expiration is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
