Keppel DC REIT Completes Strategic Japan Data Centre Acquisition and Updates Use of Preferential Offering Proceeds
Keppel DC REIT Completes Strategic Japan Data Centre Acquisition and Updates Use of Preferential Offering Proceeds
Key Highlights:
- Completion of the acquisition of a major data centre in Inzai City, Japan, with Keppel DC REIT now holding a 98.47% effective interest in Tokyo Data Centre 3.
- Acquisition Fee revisions: The Manager’s Acquisition Fee increased to approximately JPY 687.2 million (S\$6.0 million), payable in units.
- Detailed breakdown of S\$404.5 million gross proceeds from the recent Preferential Offering, with significant portions still pending utilisation.
- Ongoing asset enhancement initiatives and land lease extensions in Singapore, alongside debt repayment plans.
Acquisition of Tokyo Data Centre 3, Inzai City, Japan
Keppel DC REIT Management Pte. Ltd., as manager of Keppel DC REIT, has announced the completion of its acquisition of a substantial data centre asset—Tokyo Data Centre 3—located in Inzai City, Japan. Following this transaction, Keppel DC REIT now effectively owns 98.47% of the property, marking a significant expansion of the trust’s footprint in the Japanese data centre market, which is a strategic growth region.
As previously disclosed, the acquisition fees, comprising both the Acquisition Fee payable to the Manager and the Keppel Japan Acquisition Fee, amount to 1.0% of the effective purchase consideration. Notably, due to changes in the transaction metrics, the Acquisition Fee to the Manager has risen to JPY 687.2 million (approximately S\$6.0 million, based on an exchange rate of JPY 100:S\$0.8723 as at 31 October 2025). The fee is payable in units, and the corresponding Keppel Japan Acquisition Fee will also be adjusted. Importantly, while the individual fees have changed, the total aggregate amount remains unchanged.
Update on Use of Preferential Offering Proceeds
The Manager has provided a comprehensive update on the use of the gross proceeds of approximately S\$404.5 million raised via a fully underwritten, non-renounceable Preferential Offering. As of the latest update, S\$277.4 million has been utilised, with the remaining S\$127.1 million pending allocation.
Breakdown of Proceeds Utilisation:
| Purpose |
Intended Use (S\$ million) |
Actual Use (S\$ million) |
Remaining Pending (S\$ million) |
| Acquisition of 98.47% interest in Tokyo Data Centre 3 (Japan) |
229.8 |
229.8 |
0 |
| Asset enhancement initiative for Keppel DC Singapore 8 |
53.9 |
1.0 |
52.9 |
| 30-year land lease extension for Keppel DC Singapore 1 |
10.7 |
10.7 |
0 |
| Debt repayment (including investments-related debt) |
104.5 |
31.8 |
72.7 |
| Estimated fees and expenses (including professional fees) |
5.6 |
4.1 |
1.5 |
| Total |
404.5 |
277.4 |
127.1 |
The Manager has committed to further announcements as and when the remaining proceeds are materially utilised, ensuring ongoing transparency for investors.
Potential Price-Sensitive Developments
- Expansion in Japan: The completion of the Tokyo Data Centre 3 acquisition significantly increases Keppel DC REIT’s exposure to Japan’s robust data centre market, which could drive future earnings and portfolio diversification.
- Fee Adjustments: Revision in Manager’s Acquisition Fee, payable in units, may have implications for unit dilution and management interests alignment.
- Pending Proceeds: Over S\$127 million from the Preferential Offering remains unutilised, with a substantial S\$52.9 million earmarked for asset enhancement and S\$72.7 million for debt repayment, which could impact future gearing levels and distribution yields depending on utilisation strategy.
- Ongoing Initiatives: Commitments to asset enhancement and strategic land lease extensions in Singapore suggest ongoing portfolio optimisation, which may influence long-term value and distributions.
Investor Considerations
- Investors should monitor future announcements regarding the deployment of outstanding capital, as decisions on asset enhancement and debt repayment could materially affect the REIT’s financial profile.
- The successful completion of a major overseas acquisition and associated fee adjustments may influence perceptions of management’s deal-making capability and alignment with unitholders’ interests.
- The REIT’s continued expansion and capital management strategy, including its ability to execute and integrate new assets, will be key to its ongoing performance and distribution stability.
Disclaimer
This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer or solicitation to buy or sell any securities. Investors should conduct their own research and consult their professional advisors before making any investment decisions. Past performance is not indicative of future results, and all investments carry risk, including the potential loss of principal.
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