Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
Loh Hwee Long, CEO of the manager of Keppel DC Reit, stated this expands its network of institutional and functional partners, and strengthens its capability to source and gain access to future investment prospects globally.
The Reit will take an 88.62% stake in each data centre, whilst Keppel, with its interest in Keppel Japan KK, will hold a 1.38% effective interest.
Keppel DC Reit said the purchase will boost its distribution per unit immediately whilst also providing multiple channels of long-term revenue development. The assets benefit from contracted average annual rent rise of regarding 2.8%, and the in-place rents are estimated to be at least 30% below dominating industry rents.
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Keppel DC Reit and Keppel are collectively acquiring 90% efficient rate of interests in 2 freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
Keppel DC Reit will therefore pay about JPY168.4 billion for its reliable rate of interest in both information centres.
On the other hand, the existing operator will maintain a 10% stake in each asset, to guarantee “alignment of interests and working continuity”, the bourse filing mentioned.
The weighted average lease expiration is approximately 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
Its manager prepares 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.
Three of the 4 investment-grade clients throughout both Tokyo information facilities are updated to the Reit’s portfolio, which broadens its client base and minimizes client focus risk.
Established in Inzai City, among Japan’s the majority of developed hyperscale data-centre clusters, both totally matched, colocation properties are fully inhabited by four investment-grade internet enterprise and IT services clients.
The overall purchase cost on a 100% basis is JPY190 billion ($1.55 billion), which reaches a 2.1% price cut to the assets’ assessment of JPY194 billion, said the Reit manager in a Sept 1 bourse filing.
With the procurement, Japan’s contribution to the Reit’s portfolio rental income increases to around 23%, from 9% as at end-June this year.
