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Keppel DC REIT has agreed to acquire a 99 percent stake in Kingsland Data Centre for $295.1 million.
Located in Jurong, the five-storey, purpose-built, carrier-neutral co-location data centre has a net lettable area of about 98,769 sq ft. It was completed in phases from 2015, with its IT power fully committed. Kingsland Data Centre’s committed occupancy is 84.2 percent, with offices accounting for the vacant spaces.
The facility will be renamed Keppel DC Singapore 5 (KDC SGP 5) upon completion of the acquisition in Q2 this year.
The acquisition will be funded by net proceeds raised from the private placement of 224 million new units in Keppel DC REIT, and the remaining net proceeds of its pro-rata preferential offering launched in 2016.
In an SGX filing, Keppel DC REIT revealed plans to appoint a subsidiary of Keppel Data Centres Holding as “master lessee and facility manager under a Keppel master lease arrangement that is similar to the other Singapore data centres in Keppel DC REIT’s portfolio”.
“As a key data centre hub in Asia, Singapore continues to see strong demand from multinational firms for quality data centre space. 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,” said Chua Hsien Yang, CEO of Keppel DC REIT Management.
In fact, the acquisition, which is expected to raise Keppel DC REIT’s distribution per unit, is set to boost the REIT’s Singapore footprint to almost 300,000 sq ft of total lettable area.
The REIT noted that its expanded portfolio will provide greater income resilience and a stronger platform for growth.
“Following the transaction and private placement, based on the pro forma as at Q1 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 1,142,736 sq ft across 15 data centres in Asia Pacific and Europe,” it said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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