Keppel DC Reit and Keppel take 90% stakes in two Japan hyperscale data centres
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% efficient interest.
The weighted average rent expiration is roughly 4.5 years for Tokyo Data Centre 4 and 10.6 years for Tokyo Data Centre 5.
The complete acquisition cost on a 100% basis is JPY190 billion ($1.55 billion), that is at a 2.1% price cut to the properties’ assessment of JPY194 billion, said the Reit administrator in a Sept 1 bourse filing.
With the procurement, Japan’s contribution to the Reit’s account rental income enhances to about 23%, from 9% as at end-June this year.
Keppel DC Reit will therefore pay regarding JPY168.4 billion for its effective rate of interest in the two data hubs.
Three of the four investment-grade clients across the two Tokyo data facilities are updated to the Reit’s portfolio, which broadens its client base and reduces client focus risk.
Its manager plans to finance 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.
Loh Hwee Long, CEO of the manager of Keppel DC Reit, said this broadens its network of institutional and functional partners, and enhances its capacity to source and get access to future investment opportunities internationally.
Meanwhile, the existing operator will retain a 10% risk in each asset, to ensure “alignment of interests and operational continuity”, the bourse filing said.
Keppel DC Reit said the procurement will raise its distribution per unit instantly while also providing numerous avenues of long-term revenue growth. The properties gain from acquired average annual lease growth of about 2.8%, and the in-place rental fees are approximated to be at least 30% below prevailing market rents.
Established in Inzai City, one of Japan’s a lot of established hyperscale data-centre clusters, both fully matched, colocation assets are fully occupied by four investment-grade internet venture and IT services clients.
Keppel DC Reit and Keppel are jointly getting 90% effective interests in two freehold, hyperscale data centres– Tokyo Data Centre 4 and Tokyo Data Centre 5– in Greater Tokyo.
