Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Positioned in Inzai City, one of Japan’s many established hyperscale data-centre clusters, both completely matched, colocation possessions are completely occupied by four investment-grade internet enterprise and IT services clients.
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% effective interest.
Its manager intends to finance the procurement with a mix of equity and yen-denominated debt. The deal is expected to be completed in the 4th quarter of this year.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, stated this broadens its network of institutional and operational partners, and enhances its ability to source and access future investment possibilities globally.
Three of the 4 investment-grade customers throughout the two Tokyo data facilities are updated to the Reit’s portfolio, that broadens its client base and minimizes client focus risk.
On the other hand, the existing operator is going to preserve a 10% risk in each asset, to ensure “placement of interests and operational continuity”, the bourse filing said.
Keppel DC Reit and Keppel are collectively acquiring 90% reliable rate of interests in 2 freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
The weighted average lease expiry is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The total purchase cost 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, said the Reit manager in a Sept 1 bourse filing.
With the procurement, Japan’s contribution to the Reit’s account rental income enhances to around 23%, from 9% as at end-June this year.
Keppel DC Reit will certainly hence pay concerning JPY168.4 billion for its reliable rate of interest in both data hubs.
Keppel DC Reit said the procurement will boost its distribution each instantly whilst also offering several avenues of long-term income growth. The assets benefit from acquired average annual rent growth of regarding 2.8%, and the in-place rental fees are estimated to be a minimum of 30% below dominating industry rents.
