Keppel DC REIT Guangdong Data Centre 2

Keppel DC REIT appears to be temporising over challenges facing its China assets, and remains non-committal towards stating when it will decide to terminate the lease with a delinquent tenant.

The REIT first disclosed on 15 December that it has issued a letter of demand to this tenant, Guangdong Bluesea Data Development, in relation to the lease at Guangdong Data Centres (GDCs) 1, 2 & 3 - currently the only assets it owns in China.

The letter of demand seeks to recover sums in arrears to-date of RMB 48.3 million (SGD9 million) and this includes rent charges for four months and late payment-related fees.

Meanwhile, the REIT has allocated a loss allowance to account for this lack of rental collection, and has factored this into its latest financial results.

Related: Keppel DC REIT sees SGD11.1 million net outflow of institutional funds

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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.