Keppel DC REIT's property in Tampines, Singapore, known as Keppel DC Singapore 2 (Photo: REITsWeek)

Approximately five months after listing on the Singapore Exchange, Keppel DC REIT (SGX:AJBU) announced on 28 May that it has entered into its maiden sale and purchase agreement with Australia’s Macquarie Telecom to acquire a data centre in Sydney for AUD43.3 million (SGD44.7 million)

The acquisition, which will comprise of the shell and core building of Intellicentre 2 (IC2), marks Keppel DC REIT's maiden acquisition attempt five months after its listing.

IC2 is a Tier III data centre with a total lettable area of 8,169 square metres and sits on approximately 20,000 square metres of freehold land. The property was completed in 2012 and located within the Macquarie Business Park. Upon acquisition, Macquarie Telecom will sign a 20-year triple net lease agreement with Keppel DC REIT for the property.

With this acquisition, Keppel DC REIT expects its overall portfolio weighted average lease expiry (WALE) to increase to 9.2 years. The REIT has indicated that the acquisition will initially be fully funded by debt and increase the REIT’s gearing from 26.7% to approximately 29.9%. It is expected to be completed in the third quarter of 2015.

Upon completion, Keppel DC REIT will have a portfolio of nine data centres across Europe and the Asia-Pacific region valued at approximately SGD1.07 billion.

Units of Keppel DC REIT last changed hands on the Singapore Exchange at SGD1.07.

A data centre in Tampines, Singapore under Keppel DC REIT.
A data centre in Tampines, Singapore under Keppel DC REIT.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.