Keppel DC Reit buys two freehold data centres in Japan for US$1.2 billion

Keppel DC Reit and Keppel have agreed to purchase nearly all of two data centres in Tokyo for US$1.2 billion. The two freehold, hyperscale co-location data centres, Tokyo Data Centre 4 and Tokyo Data Centre 5, will become 88.62% and 1.38% owned by Keppel DC Reit respectively, with Keppel holding the remaining 1.38% through its Japan subsidiary.

The current operator will retain a 10% stake in each data centre. These acquisitions will bolster Keppel DC Reit's presence in the Japan market, providing embedded growth opportunities through rent escalators and potential reversion benefits. The trust plans to raise at least S$600 million through a private placement on September 10, with the new units trading at a discount to the volume-weighted average price.

The acquisition is expected to immediately increase DPU for the FY2025 fiscal year. Upon completion in the fourth quarter of 2026, the acquisition will be immediately DPU accretive. The data centres are expected to increase portfolio rental income, contract power capacity, and extend weighted average lease expiry.