Keppel Ltd. (Keppel or the Company) is pleased to announce the divestment of a Keppel-led data centre joint venture (Keppel JV) to Keppel DC REIT for a total gross divestment price of S$1.38 billion, in one of the largest data centre transactions in Southeast Asia.
The Keppel JV, a 60-40 joint venture between Keppel’s Connectivity Division and Cuscaden Peak Investments Private Limited, owns the Keppel Data Centre Campus at Genting Lane in Singapore (Campus), and comprises two completed and fully contracted data centres, namely Keppel DC Singapore 7 (KDC SGP 7) and Keppel DC Singapore 8 (KDC SGP 8), as well as a vacant land plot earmarked for a third data centre, which has been carved out from the proposed transaction.
The construction of KDC SGP 7 and KDC SGP 8 was funded by the Keppel JV, Keppel’s private fund Alpha Data Centre Fund, and its parallel fund (collectively, ADCF), as well as co-investors.
Upon the completion of the proposed transaction and the exercise of the call option, Keppel DC REIT will fully own KDC SGP 7 and KDC SGP 8, while Keppel will continue to serve as the operator and facility manager for the two data centres.
This proposed acquisition by Keppel DC REIT is expected to be 8.1%5 DPU-accretive and will bolster its portfolio with two AI-ready hyperscale data centres within a campus in Singapore, which is Asia’s top data centre hub.
KDC SGP 7 and KDC SGP 8 are 100% contracted to global hyperscalers from across the cloud services, internet enterprise and telecommunications sectors on a colocation basis. The proposed acquisition will expand Keppel DC REIT’s AUM by 36% to S$5.2 billion6 with 25 data centres across Asia Pacific and Europe, as well as strengthen its foothold in Singapore.
Keppel’s share of the total gross divestment price of S$1.38 billion shall be approximately S$280 million, based on Keppel’s effective stake in the Keppel JV, which includes both its interests in the Keppel JV and indirect interests via ADCF.
The Campus’ remaining vacant land plot, which is not part of the proposed transaction, will be sub-leased to Keppel’s private funds, namely Keppel DC Fund II and the upcoming Keppel DC Fund III, where Keppel will have the opportunity to develop Keppel DC Singapore 9, the third data centre in the Campus, together with its two data centre private funds.
Business News Asia
