Keppel DC REIT expands portfolio with new acquisitions in China

Keppel DC REIT has agreed to acquire two info centre amenities, on a entirely-equipped basis, in Jiangmen, Guangdong Province, for RMB 1,380.6 million (close to S$297.1 million). 

The Singapore-detailed REIT entered into agreements with Guangdong Bluesea Info Improvement Co. Ltd. (Bluesea) and its parent corporation, Guangdong Bluesea Cellular Advancement Co. Ltd. to obtain the two information centre amenities.

The two transactions comply with the acquisition of Guangdong Information Centre, Keppel DC REIT’s first acquisition in China, declared in July 2021. Following the completion of the most recent transactions, Keppel DC REIT will very own 62.9% of its belongings in Asia. 

The two info centre amenities will be named Guangdong Info Centre 2 and Guangdong Info Centre 3 (Guangdong DC 2 and Guangdong DC 3) respectively on completion of the acquisition. Guangdong DC 2 is thoroughly-equipped and payment will be made in complete at legal completion. Guangdong DC 3 will be equipped out, with its envisioned completion to choose position by the third quarter of 2023.

When partial payment will be built for Guangdong DC 3, Bluesea will pay Keppel DC REIT lease for the constructing shell and an desire on the partial payment, with the remainder to be paid when the in shape-out works are done. The homes will be leased to Bluesea on a triple web basis for 15 yrs. 

With a gross flooring location of approximately 40,920 sqm (440,462 sq ft), the two 7-storey facts centres are made in accordance with the Code for Design of Details Centre Quality A GB, exactly where Quality A is the highest regular for knowledge centres in China. 

The Guangdong-Hong Kong-Macao Larger Bay Space has been recognized as one particular of China’s 8 countrywide computing hubs that will assistance the country’s electronic development. As a key technological know-how hub and 1 of China’s most established information centre markets, the Guangdong data centre industry is established to grow even more with the growing need for higher-high quality, productive information centres, and this market will also gain from the tightening supply of these types of vital infrastructure. 

Anthea Lee, CEO of Keppel DC REIT Administration Pte. Ltd. (the Supervisor), reported, “Data centres are a significant portion of the digital infrastructure that supports several other industries and progress regions. The acquisition will increase the selection of details centres in the portfolio that are leased on a master leased basis resulting in increased portfolio weighted common lease expiry and occupancy.” 

Centered on the valuations by Savills Valuation and Qualified Companies (S) Pte. Ltd., an independent valuation organization appointed by the trustee of Keppel DC REIT, the sector worths of Guangdong DC 2 and Guangdong DC 3, every on a totally-fitted basis, are RMB 698. million (around S$150.2 million) and RMB 691. million (close to S$148.7 million) respectively as at 1 June 2022. 

The acquisitions are expected to be accretive to Keppel DC REIT’s distribution for every Device. Publish acquisitions, Keppel DC REIT’s portfolio occupancy fee will raise from 98.7% as at 31 March 2022 to 98.9% and weighted average lease expiry will increase from 7.7 decades as at 31 March 2022 to 8.8 yrs. 

The acquisition for Guangdong DC 2 is predicted to be completed in the 2nd half of 2022, whilst the acquisition for Guangdong DC 3 is envisioned to be completed by the third quarter of 2023. The Manager intends to fund the buy issues with a blend of credit card debt, fairness and/or present money. Post completion, Keppel DC REIT’s aggregate leverage is predicted to maximize from 36.1% as at 31 March 2022 to 37.2%. 

With the acquisition of Guangdong DC 2 and Guangdong DC 3, Keppel DC REIT will have an expanded portfolio of 23 quality data centres across Asia Pacific and Europe, 3 of which are in China.