Keppel DC REIT buys Singapore data center for $221m
Keppel DC REIT has entered into a conditional sale and purchase agreement for the acquisition of a 99 percent interest in Kingsland Data Centre in Singapore at an agreed value of $221 million.
Kingsland Data Centre is a five-story, purpose-built, carrier-neutral colocation data center hosting leading Internet enterprise and IT services clients. Completed in phases starting from 2015, the facility is located in Jurong with approximately 98,769 square feet. The facility’s IT power is fully committed. In addition, the facility’s committed occupancy is 84.2 percent, with the vacancy being office space.
The acquisition is expected to be accretive to Keppel DC REIT’s distribution per unit (DPU). Upon the expected completion of the acquisition in the second quarter of 2018, the facility will be renamed as Keppel DC Singapore 5 (KDC SGP 5). Leveraging the Keppel Group’s data center operational track record, it is intended that a subsidiary of Keppel Data Centers Holding will be appointed as master lessee and facility manager under a Keppel master lease arrangement that is similar to the other Singapore data centers in Keppel DC REIT’s portfolio.
“As a key data center hub in Asia, Singapore continues to see strong demand from multinational firms for quality data center space,” said Chua Hsien Yang, CEO of Keppel DC REIT Management. “The addition of KDC SGP 5 will allow Keppel DC REIT to establish a strategic presence in the western part of Singapore and diversify its offering to clients. KDC SGP 5 will boost the REIT’s footprint in Singapore to nearly 300,000 square feet of aggregate lettable area.”
The REIT’s expanded portfolio will create greater income resilience and a stronger platform for growth. Following the transaction and private placement, based on the pro forma as at first quarter 2018, the REIT’s aggregate leverage will improve from 37.4 percent to approximately 32.1 percent. Assets under management will increase to approximately $1.97 billion, with aggregate lettable area of approximately 1.14 million square feet across 15 data centers in Asia Pacific and Europe.
