Eindhoven Campus (Keppel DC REIT)Eindhoven Campus (Keppel DC REIT)

Keppel DC REIT has entered into agreements to acquire two data centre facilities on a fully-fitted basis in Guangdong for RMB 1,380.6 million (SGD297 million).

The two transactions follow the acquisition of Guangdong Data Centre, Keppel DC REIT’s first acquisition in China, announced in July 2021.

The two data centre facilities will be named Guangdong Data Centre 2 and Guangdong Data Centre 3 (Guangdong DC 2 and Guangdong DC 3) respectively.

Guangdong DC 2 is fully-fitted and payment will be made in full at legal completion.

Guangdong DC 3 will be fitted out, with its expected completion to take place by the third quarter of 2023.

The assets feature a gross floor area of approximately 40,920 square metres.

The properties are being acquired from Guangdong Bluesea Data Development.

“As a major technology hub and one of China’s most established data centre markets, the Guangdong data centre market is set to grow further with the rising demand for high-quality, efficient data centres, and this market will also benefit from the tightening supply of such critical infrastructure”, said the REIT.

“The acquisition will increase the number of data centres in the portfolio that are leased on a master leased basis resulting in higher portfolio weighted average lease expiry and occupancy”, its CEO, Anthea Lee, added.

The acquisition for Guangdong DC 2 is expected to be completed in the second half of 2022, while the acquisition for Guangdong DC 3 is expected to be completed by the third quarter of 2023.

Following the completion of the latest transactions, Keppel DC REIT will own 62.9% of its assets in Asia.

Post acquisitions, Keppel DC REIT's portfolio occupancy rate will increase from 98.7% as at 31 March 2022 to 98.9% and weighted average lease expiry will increase from 7.7 years as at 31 March 2022 to 8.8 years.

The REIT intends to fund the purchase considerations with a mix of debt, equity and existing cash.

Post completion, Keppel DC REIT's aggregate leverage is expected to increase 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 a portfolio of 23 data centres across the Asia-Pacific and Europe, three of which are in China.

Keppel DC REIT was last done on the Singapore Exchange at SGD1.91, which presently implies a distribution yield of 5.16% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.