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Keppel DC Real Estate Investment Trust (REIT) announced Wednesday (6 October) that it has acquired a data centre in the United Kingdom from Cardiff Data Investments Limited for £34 million (S$59.7 million).
Sited on a 26,000-sq m freehold site, the data centre in Cardiff, Wales has a total lettable area of around 7,380 sq m. The data centre completed in 2003 is currently fully-leased to one of the biggest global cloud service providers on a 15-year triple-net lease that started in June 2016.
Credit Suisse noted that the lease comes with an annual rent escalations of two to four percent.
In an SGX filing, the Reit’s manager revealed that the acquisition is expected to be accretive to Keppel DC REIT’s distribution per unit.
“Post-acquisition, the portfolio weighted average lease expiry will improve from 8.7 years to 9.5 years while the percentage of freehold assets will increase from 39.7 percent to 43.2 percent,” it said.
The acquisition is fully funded by GBP-denominated debt with a tenure of five years, and fixed interest cost below two percent per annum, said Credit Suisse.
With the acquisition, Keppel DC REIT’s aggregate leverage increased from 29.1 percent to approximately 32.5 percent.
Assets under management also increased to around S$1.13 billion across 10 data centres, excluding maincubes Data Centre which is under construction in Germany and Milan Data Centre which is pending transaction completion.
Chua Hsien Yang, CEO of the Reit’s manager, said: “This marks Keppel DC REIT’s fourth acquisition since its listing in end-2014.”
“In addition to the visible pipeline of assets from the Sponsor, Keppel DC REIT will continue to pursue income-producing assets from third parties, such as the Cardiff data centre, that will complement its portfolio profile and enhance total returns to its investors.”
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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