Keppel DC REIT to buy 98.47% stake in Tokyo Data Centre 3 for $707m

This increases its Japan’s share of assets from 4.3% to 16.4%.

Keppel DC REIT will acquire a 98.47% interest in Tokyo Data Centre 3 in Inzai City, Greater Tokyo, for $707m (JPY 82.1b).

Its effective share of the purchase price is $696.1m (JPY 80.8b), bringing the total outlay, including fees and taxes, to $708.3m (JPY 82.2b).

The freehold, five-storey facility is a new hyperscale data centre built to Tier III-equivalent standards and latest seismic codes.

It has a gross floor area of about 197,872 sq ft and is fully leased for 15 years to a Fortune Global 500 technology company, with annual rent escalations.

The deal will boost Keppel DC REIT’s Japan portfolio from 4.3% to 16.4% of total assets and raise overall assets under management to $5.7b across 25 data centres in 10 countries. Management expects the acquisition to be immediately DPU-accretive, lifting FY2024 pro forma DPU from 9.451 cents to 9.712 cents.

The purchase will be funded through JPY-denominated debt, proceeds from a preferential offering, and new units issued as fees.

Aggregate leverage is projected to rise from 30.0% to 34.5% whilst maintaining a debt headroom of about $559m.

Completion is targeted by end-2025, subject to regulatory and contractual approvals.