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Keppel DC REIT is looking acquire data centres in Europe and the Asia Pacific region with high capitalization rates (cap rates) or the rate of return on an investment property, according to a report from Credit Suisse.
In the Asia Pacific, target markets include Australia, Singapore, China, Tokyo, Seoul and Jakarta. In Australia, cap rates range from 5.5 percent to 7.5 percent, while in Singapore, cap rates are at 6 to 7 percent, however only a few assets are traded.
Meanwhile, capitalization rate in Hong Kong is between 4 percent and 5 percent, while that in Tokyo and Seoul ranges from 4-6 percent, but China’s 6-9 percent cap rate is greater.
While Jakarta offers a more appealing figure of at least 10 percent, it comes with higher risks, said the financial institution. Nevertheless, there are opportunities in the Indonesian capital as banks are required to house a portion of data locally.
In Europe, Keppel DC REIT may purchase assets in Germany given its key hub status with cap rates ranging from 5.5 percent to 7.5 percent. France is another potential location thanks to its low electricity costs and high cap rates of 6 to 8 percent.
As for assets wherein the trust has the Right of First Refusal (ROFR), T27 in Singapore is expected to be bought for S$200 million then injected into Keppel DC REIT by 1H 2016. The Almere Data Centre 2 in the Netherlands could follow in 2017 after the trust acquires it for around about S$100 million, added Credit Suisse.
Meanwhile, Keppel DC REIT’s net property income from 12 December 2014 (listing date) to Q2 2015 has reached $48.1 million, surpassing its IPO projection of S$46.8 million by 2.6 percent.
As a result, its distributable income to unitholders hit $31.4 million, or 1.6 percent above forecast.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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