Keppel DC Reit to acquire data centres from Keppel for S$1.4 billion

KEPPEL DC Real Estate Investment Trust (Keppel DC Reit) has proposed to acquire interests in two data centres from a Keppel joint venture (JV) for S$1.4 billion.

Keppel DC Reit will purchase a 49 per cent interest in the Keppel JV, as well as subscribe for two new classes of securities issued by the JV for up to S$1.03 billion. This would result in the Reit holding 99.49 per cent interest in the two data centres – KDC SGP 7 and KDC SGP 8.

The deal is expected to be completed by end-2025.

Keppel DC Reit will be granted a call option, which it expects to exercise in the second half of 2025, to acquire the remaining 51 per cent stake in the JV from Keppel.

The proposed acquisition by Keppel DC Reit is expected to be 8.1 per cent distribution per unit-accretive, said Keppel and the Reit on Tuesday (Nov 19).

It will also expand the trust’s assets under management by 36 per cent to S$5.2 billion, with 25 data centres across Asia-Pacific and Europe.

Keppel DC Reit manager said it intends to finance the total acquisition cost with net proceeds from an equity fund raising in November, debt facilities, as well as the issuance of acquisition fee units amounting to about S$10.2 million.

The proposed transaction is not expected to have any material impact on the earnings per share and net tangible assets per share of Keppel for the financial year ending Dec 31, 2024.

Shares of Keppel were trading up 1.8 per cent or S$0.12 at S$6.70 shortly after the market opened on Tuesday. Keppel DC Reit called for a trading halt on Tuesday morning; its units ended the previous day 0.5 per cent or S$0.01 lower at S$2.19.

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