Keppel sells two data centres to Keppel DC REIT for $50.5m

FY2024 pro forma DPU rises 0.8%

Keppel Ltd.’s Connectivity Division has agreed to sell its remaining stakes in Keppel DC Singapore 3 and Keppel DC Singapore 4 to Keppel DC REIT for a total cash consideration of $50.5m, according to a press release.

The transaction involves the sale of a 10% interest in Keppel DC Singapore 3 and a 1% interest in Keppel DC Singapore 4. Upon completion, expected by 1Q 2026, Keppel DC REIT will hold 100% ownership of both assets.

On a pro forma basis, assuming completion on 1 January 2024, distribution per unit (DPU) for FY2024 would increase 0.8% to 9.525 Singapore cents from 9.451 cents, while aggregate leverage would improve to 29.5% from 29.8%.

The acquisition will be funded using part of the proceeds from the REIT’s recent preferential offering, alongside the issuance of units to the manager for the acquisition fee. Post-transaction debt headroom is estimated at $944m.

The divestment forms part of Keppel’s asset monetisation programme, bringing announced monetisation year-to-date to more than $2.4b. Following completion, assets under management (AUM) would rise about 3.5% to $5.9b, with Singapore assets accounting for 58.8% of AUM.

The two carrier-neutral data centres, located in Tampines, have a combined lettable area of 139,469 sq ft and are fully contracted to clients with established credit profiles, the announcement said.

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