Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
The Reit will take an 88.62% claim in each data center, while Keppel, through its interest in Keppel Japan KK, will hold a 1.38% reliable interest.
On the other hand, the existing operator is going to maintain a 10% risk in each asset, to assure “positioning of interests and operational continuity”, the bourse filing mentioned.
Keppel DC Reit will hence pay about JPY168.4 billion for its effective rate of interest in both information hubs.
Located in Inzai City, one of Japan’s most established hyperscale data-centre clusters, both fully fitted, colocation properties are completely inhabited by four investment-grade internet business and IT services clients.
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 overall purchase cost on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% discount to the properties’ assessment of JPY194 billion, said the Reit supervisor in a Sept 1 bourse filing.
Keppel DC Reit said the purchase will boost its distribution per unit instantly while also offering 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% below dominating industry rents.
With the purchase, Japan’s contribution to the Reit’s portfolio rental income increases to around 23%, from 9% as at end-June this year.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, stated this expands its network of institutional and operational partners, and strengthens its capacity to source and get access to future investment prospects globally.
Keppel DC Reit and Keppel are collectively getting 90% effective rate of interests in two freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
3 of the four investment-grade customers across both Tokyo information centres are new to the Reit’s portfolio, which broadens its client base and decreases client focus risk.
Its manager prepares to fund the purchase with a mix of equity and yen-denominated debt. The deal is anticipated to be finished in the fourth quarter of this year.
