Keppel DC REIT to acquire Tokyo Data Centre 1 for $201m

This marks Keppel DC REIT’s entry into Japan.

Keppel DC REIT Management Pte. Ltd, manager of Keppel DC REIT, has finalised an agreement with Keppel Ltd. to acquire a shell and core data centre in Tokyo, Japan for JPY 23.4b ($201m).

The acquisition, at a 2.5% discount to its valuation, gives Keppel DC REIT a 98.47% stake in the property, with Keppel holding the remaining 1.53%.

Tokyo Data Centre 1, completed in 2019, boasts a net lettable area of 190,166 sq ft and is leased to a Fortune Global 500 company and hyperscaler on a triple-net basis.

With approximately seven years left on its lease, the centre is poised for rental growth amidst rising demand for generative AI and limited data centre supply in Japan.

The acquisition marks Keppel DC REIT’s entry into Japan, Asia’s second-largest data centre hub, projected to grow over 10% annually from 2024 to 2028. Tokyo, which has an estimated operational IT load exceeding 1,000 megawatts, constitutes over 80% of Japan's total operational capacity.

Strategically located in West Tokyo, Tokyo Data Centre 1 adheres to the latest seismic design standards and features a base isolation system. This acquisition will enhance Keppel DC REIT’s portfolio occupancy from 98.1% to 98.2% and increase the weighted average lease expiry from 6.5 years to 6.6 years.

“Our first acquisition in Japan, one of the largest and fastest growing data centre markets in Asia, demonstrates our ability to acquire quality assets in key data centre hubs,” said Loh Hwee Long, CEO of the Manager.

“Japan is a core market and the addition of Tokyo Data Centre 1 will further strengthen our portfolio’s geographical, as well as income diversification,” he added.

Upon completion in Q3 2024, Keppel DC REIT's assets under management will rise to $3.8b, with a total of 23 data centres across 10 countries in Asia Pacific and Europe.

The acquisition is expected to be 1.1% accretive to DPU.

The transaction will be funded through Yen-denominated debt, providing a natural hedge over its capital value and benefiting from lower financing costs. Consequently, Keppel DC REIT’s average cost of debt will improve to 3.3%, with an aggregate leverage of 39.4%.

Also Read

COTD: APAC deal volume falls 6.8% amidst economic uncertainties and tensions

Securitisation seen as key for Singapore developers to enhance returns

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit