Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
The total purchase price on a 100% basis is JPY190 billion ($1.55 billion), that reaches a 2.1% price cut to the properties’ valuation of JPY194 billion, said the Reit supervisor in a Sept 1 bourse declaring.
Loh Hwee Long, CEO of the executive of Keppel DC Reit, stated this broadens its network of institutional and operational partners, and strengthens its ability to source and access future investment prospects internationally.
The Reit will take an 88.62% stake in each data center, while Keppel, through its interest in Keppel Japan KK, are going to hold a 1.38% effective interest.
Keppel DC Reit and Keppel are jointly obtaining 90% effective rate of interests in 2 freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
With the procurement, Japan’s contribution to the Reit’s portfolio rental income enhances to around 23%, from 9% as at end-June this year.
Keppel DC Reit said the procurement will increase its distribution each instantly while also providing numerous avenues of long-term income growth. The properties gain from contracted average annual lease growth of concerning 2.8%, and the in-place rents are estimated to be a minimum of 30% below prevailing industry rents.
Established in Inzai City, among Japan’s a lot of developed hyperscale data-centre clusters, both fully matched, colocation assets are fully inhabited by four investment-grade internet enterprise and IT services clients.
Keppel DC Reit will certainly hence pay regarding JPY168.4 billion for its effective interest in both information hubs.
The weighted average rent expiry is about 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
On the other hand, the existing operator is going to maintain a 10% risk in each asset, to ensure “alignment of interests and working continuity”, the bourse filing stated.
3 of the four investment-grade customers throughout both Tokyo data facilities are updated to the Reit’s profile, that broadens its client base and decreases client concentration risk.
Its manager intends to fund the acquisition with a mix of equity and yen-denominated debt. The deal is anticipated to be finished in the fourth quarter of this year.
