Keppel Dc Reit Acquires Tokyo Data Centre 707 Million Prices Preferential Offering 224 New Unit
Keppel DC REIT, together with its sponsor Keppel, has announced its acquisition of Tokyo Data Centre 3 for 82.1 billion yen, equivalent to approximately $707 million. The newly-built, freehold hyperscale data centre is located in Inzai City, Greater Tokyo, and it will become the REIT’s second data centre asset in Japan. The total purchase price represents a 1.1% discount to the asset’s valuation of 83 billion yen, or $714.7 million.
Upon completion of the transaction, Keppel DC REIT will have a 98.47% effective interest in the data centre, with Keppel retaining the remaining 1.53%. This move further strengthens the REIT’s presence in Japan and adds to its growing portfolio of high-quality assets in Asia Pacific and Europe.
According to Keppel DC REIT, the Tokyo Data Centre 3 is fully contracted to a leading global hyperscaler for 15 years, with built-in annual rent escalation. This long-term lease agreement adds stable and recurring income to the REIT’s portfolio.
Loh Hwee Long, CEO of the manager, states, “The accretive acquisition of Tokyo Data Centre 3 aligns with our value creation strategy to pursue hyperscale opportunities in established data centre hubs.”
He adds, “Japan has favorable demand-supply dynamics for data centres and its strategic position as an interconnect location between Asia and the Americas makes it a compelling market for long-term growth. We are pleased to expand our presence in Japan with another high-quality asset that will enhance our portfolio and strengthen our income diversification.”
To fund the acquisition, Keppel DC REIT has launched a pro rata non-renounceable preferential offering to raise gross proceeds of approximately $404.5 million. Entitled unitholders will be offered 80 new units at $2.24 each for every 1,000 existing units held. The proceeds will also go towards an asset enhancement initiative at Keppel DC Singapore 8, cover associated costs for a 30-year land lease extension for Keppel DC Singapore 1, as well as for debt repayment purposes.
Upon completion of the acquisition, which is expected by the end of the year, Tokyo Data Centre 3 will contribute to Keppel DC REIT’s portfolio occupancy rate, increasing it from 95.8% to 95.9%. The weighted average lease expiry will also increase from 6.92 years to 7.2 years, with the REIT’s assets under management reaching $5.7 billion. This includes 25 data centres across 10 countries in Asia Pacific and Europe.
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Year to date, Keppel DC REIT units have risen 6.79% and closed at $2.36 on the day of the announcement.
