Keppel DC REIT expands footprint in Germany with EUR81 million acquisition

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Keppel DC REIT is acquiring a purpose-built data centre in Kelsterbach, Germany from Maena KG for EUR81.8 million (SGD125.3 million).

The property will be the REIT’s second data centre in Germany, and its eighth in Europe.

The data centre is located near the Frankfurt Airport, and approximately 18 km from Frankfurt’s city centre.

It features a total lettable area of approximately 540,869 square feet, and is fully leased on a triple net lease basis until end-2025.

“The addition of this data centre will strengthen Keppel DC REIT’s foothold in Germany, which is one of the most established data centre markets in Europe”, said Chua Hsien Yang, CEO of the REIT’s manager.

“This acquisition underscores our focus on executing and delivering on our growth initiatives to capture value from the fast-growing digital economy and capitalise on rising demand for data centre facilities”, he added.

Based on the valuation by Jones Lang Lasalle SE, the market value of the property was EUR86.0 million, using both the income capitalisation and discounted cash flow methods.

The acquisition is expected to be accretive to Keppel DC REIT’s distribution per unit (DPU).

Post-acquisition, the REIT’s portfolio occupancy rate will increase from 94.5% to 96.0%.

Expected to be completed in 2020, the acquisition is likely to be fully funded by debt.

Post completion, Keppel DC REIT’s aggregate leverage is expected to increase from 30.3% to 33.6%.

Once completed, Keppel Keppel DC REIT’s portfolio will comprise 18 data centres valued at SGD2.7 billion, with an aggregate lettable area of approximately 1,952,281 square feet.

Keppel DC REIT was last done on the Singapore Exchange (SGX) at SGD1.97.

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