[SINGAPORE]   Keppel DC Reit   : AJBU 0% reported distributable income of S$195.3 million for the nine months ended Sep 30, up 55.5 per cent from S$125.6 million a year earlier.

 

Its distribution per unit (DPU) over the same period rose 8.8 per cent to S$0.0767 from S$0.0705. 

 

The DPU takes into account the expanded unit base due to the additional 180.6 million new pro-rata preferential offering units listed on Oct 22, 2025.

 

The higher distributions came from contributions from its acquisitions as well as strong portfolio performance, said the real estate investment trust&rsquo s (Reit) manager in its Q3 business update on Friday (Oct 24).

 

Revenue for the period climbed to S$322.4 million, up 37.7 per cent from S$234.1 million. 

 

Similarly, net property income (NPI) rose 42.2 per cent to S$280.2 million from S$197.1 million.

 

The manager said that the higher NPI was due mainly to acquisitions of Keppel DC Singapore 7 and 8 and Tokyo Data Centre. 

 

Higher contributions from contract renewals and escalations also boosted the Reit&rsquo s NPI.

 

However, the contributions were partially offset by divestments of its Intellicentre Campus in Australia and Kelsterbach Data Centre in Germany, as well as the absence of its one-off dispute settlement sum at Keppel DC Singapore 1 received in 2024.

 

Its finance costs for the period dropped by 6.4 per cent. The manager attributed the fall to lower interest rates and interest savings from loan repayments, although the savings were partially offset by new acquisition loans in 2024.

 

For Q3, its cost of debt stood at 2.9 per cent, down from 3.3 per cent a year earlier. 

 

Meanwhile, aggregate leverage for the Reit stood at 29.8 per cent for Q3.

 

Portfolio occupancy stood at 95.8 per cent, while the Reit posted a 10 per cent portfolio reversion with no major contract renewals in Q3.

Keppel DC REIT and sponsor Keppel are buying the Tokyo Data Centre 3 for 82.1 billion yen, or $707 million. This freehold, newly-built hyperscale data centre is located in Inzai City, Greater Tokyo and will be the REIT' s second data centre asset in Japan.

 

The total purchase consideration represents a discount of 1.1% to the asset&rsquo s valuation of 83 billion yen, or $714.7 million.

 

Upon completion of the deal, Keppel DC REIT will have a 98.47% effective interest, with Keppel holding the remaining 1.53%.

 

On a pro forma basis, if the acquisition was completed on Jan 1 2024, distribution per unit for FY 2024 would increase by 2.8% from 9.451 cents to 9.712 cents.

 

According to Keppel DC REIT, the Tokyo Data Centre 3 is now fully contracted to a leading global hyperscaler for 15 years with built-in annual rent escalation.

 

&ldquo The accretive acquisition of Tokyo Data Centre 3 is aligned with our value creation strategy to pursue hyperscale opportunities in established data centre hubs," says Loh Hwee Long, CEO of the manager.

 

" The favourable demand-supply dynamics for data centres in Japan and the country&rsquo s strategic position as an interconnect location between Asia and the Americas make it a compelling market for long-term growth.

 

" We are pleased to expand our presence in Japan with another high-quality asset that will enhance our portfolio and strengthen our income diversification," adds Loh.

 

To fund the acquisition, Keppel DC REIT has launched a pro rata non-renounceable preferential offering to raise gross proceeds of approximately $404.5 million.

 

Entitled unitholders of Keppel DC REIT will be offered 80 new units at $2.24 each for every 1,000 existing units held.

 

Besides the Tokyo data centre, proceeds will also go towards an asset enhancement initiative at Keppel DC Singapore 8, cover associated costs for a 30-year land lease extension for Keppel DC Singapore 1, as well as for debt repayment purposes.

 

The acquisition is expected to be completed by the end of the year and the Tokyo Data Centre 3 will improve Keppel DC REIT&rsquo s portfolio occupancy from 95.8% to 95.9% and increase the weighted average lease expiry from 6.92 years to 7.2 years, with its AUM reaching $5.7 billion, consisting of 25 data centres across 10 countries in Asia Pacific and Europe.

The two are AI-ready hyperscale data centres in Singapore

 

[SINGAPORE] The manager of Keppel DC Real Estate Investment Trust (Reit) has acquired the 51 per cent remaining interest in two artificial intelligence-ready hyperscale data centres in Singapore from sponsor Keppel for up to S$8.4 million. 

 

In a bourse filing on Wednesday (Sep 3), the manager said that the transaction was completed through the exercise of a call option with Keppel&rsquo s indirect wholly owned subsidiary. This gives the Reit full ownership of Memphis 1, the entity holding the two data centres.  

 

The consideration of up to S$8.4 million is subject to completion adjustments. 

 

Of this amount, about S$6.6 million is payable once the call option is completed. The sum is based on 51 per cent of Memphis 1&rsquo s net asset value at the time of completion, and includes the outstanding principal and accrued interest of the notes issued by it.

 

The remaining amount &ndash up to about S$1.8 million &ndash is payable following the completion of the call option, should there be a 10-year lease extension on the properties under the master agreement. 

 

The manager said the price was negotiated on a willing-buyer, willing-seller basis, using a fixed property value for the two data centres without assuming any lease extension. 

 

Two separate independent valuations put the combined market value of the properties as at May 1 at S$1.047 billion and S$1.064 billion, respectively. The average of the two valuations is S$1.056 billion, higher than the sum of the agreed property value of S$1.03 billion and the S$16.3 million paid as land premium. 

 

This resulting amount of S$1.046 billion was used to fix the call option property price, since it was the lower figure. 

 

The S$8.4 million consideration will be funded by debt and/or existing cash, said the manager. The acquisition is not expected to materially affect the trust&rsquo s net asset value or distribution per unit for the financial year ending Dec 31. 

Under the terms, the trust receives S$11 million a year for 15 years and gets 50% board representation

 

[SINGAPORE] The manager of Keppel DC Real Estate Investment Trust (Reit) on Monday (Aug 11) proposed the disposal of all its NetCo bonds and preference shares issued by network operator M1.

 

This comes after parent company Keppel announced that it will sell M1&rsquo s telco business to Simba Telecom, a mobile network operator, for S$1.43 billion. Keppel will receive nearly S$1 billion for its 83.9 per cent effective stake in M1.

 

Simba &ndash whose parent company is Tuas Ltd, which is owned by Australian businessman David Teoh&rsquo s TPG Telecom &ndash is expected to create more revenue pools and career opportunities from its combination with M1.

 

NetCo is a subsidiary of M1 and holds some of the telco&rsquo s mobile, fixed and fibre assets. It also has a network services agreement with M1.

 

On Dec 22, 2021, Keppel DC Reit subscribed to S$88.7 million in bonds issued by NetCo through its trustee, Perpetual (Asia). Under the terms, the Reit will receive S$11 million a year, comprising both the principal amount and interest, for a period of 15 years from the date of issuance.

 

Under the same transaction, Keppel DC Reit also subscribed to 100 per cent of the preference shares issued by NetCo, for S$1 million. 

 

These shares entitle the Reit to have 50 per cent representation on NetCo&rsquo s board of directors &ndash a move intended to give it additional protection for its investment in the bonds.

 

The NetCo bonds and preference shares will be sold to an unrelated third party, which is a Singapore-incorporated holding company, Keppel DC Reit&rsquo s manager said.

 

Assuming the sale was completed on Monday, the buyer will have to pay around S$79.2 million, the manager said. This amount comprises S$77.2 million as a principal amount for the NetCo bonds, S$1 million in accrued interest, and a principal amount of S$1 million for the preference shares. 

 

S$1.4 billion sale of M1&rsquo s telco business to Simba &ldquo important&rdquo despite accounting loss: Keppel CEO

The deal is subject to clearance from the Infocomm Media Development Authority. 

Distributable income is up 57.2% at S$127.1 million for the period

 

[SINGAPORE] Keppel DC Reit : AJBU +3.1% posted a 12.8 per cent increase in distribution per unit (DPU) to S$0.05133 for its first half of the financial year ended Jun 30, from S$0.04549 in the same year-ago period. 

 

This was attributed mainly to contributions from the acquisition of data centre buildings Keppel DC Singapore (KDC SGP) 7 and 8 last November, and Tokyo Data Centre 1 in July 2024, and contract renewals and escalations.  

 

The two hyperscale data centres KDC SGP 7 and 8 are located in Genting Lane in Singapore. The acquisition entitles the Reit to hold 99.49 per cent of the economic interest from these data centres. Tokyo Data Centre 1 was Keppel DC Reit&rsquo s first acquisition in Japan the total purchase consideration of 23.4 billion yen (S$195.3 million) was a 2.5 per cent discount to the property&rsquo s valuation of 24 billion yen. 

 

The distribution will be paid on Sep 15, after the record date on Aug 4.    

 

Separately, Loh Hwee Long, chief executive officer of the manager of the real estate investment trust (Reit), said on Friday (Jul 25) that the Reit will focus on establishing a strategic foothold in its existing markets of Japan and Europe, as well as South Korea where it has no presence yet. This will be achieved through the acquisition of hyper-scale data centres which can process large amounts of data. 

 

&ldquo Our focus is hyper-scale facilities, because that&rsquo s the segment in which we have very strong conviction will be in a sweet spot, given the developments in the sector in the years ahead,&rdquo said Loh, who was speaking at Keppel DC Reit&rsquo s financial results briefing.

 

The acquisitions have a target capitalisation rate of around 4 per cent in Japan, and around 6 per cent in Europe and South Korea, and the data centres are likely to have a power capacity of at least 20 megawatts, said Loh. 

 

Revenue was up 34.4 per cent at S$211.3 million for the half year, from S$157.2 million in H1 FY2024, said the manager of the Reit in a bourse filing on Friday. 

 

Distributable income rose 57.2 per cent to S$127.1 million from S$80.9 million, where the increase was partially offset by the divestment of Kelsterbach Data Centre in March 2025 for 50 million euros (S$75 million), and Intellicentre Campus, in addition to the absence of a one-off dispute settlement sum received in 2024.

 

Finance costs stood at S$24.5 million for H1, down 5.3 per cent year on year from S$25.9 million. Finance income rose to S$8 million for the period, up 45.7 per cent from S$5.5 million in H1 2024. 

 

Net property income rose by 37.8 per cent to S$182.8 million from S$132.6 million. 

 

As at Jun 30, aggregate leverage was at 30 per cent. Interest coverage ratio stood at 5.9 times.  

 

The Reit recorded a portfolio reversion of around 51 per cent in H1 2025. Average cost of debt fell to 3 per cent for the period, from lower floating rates compared with the same period a year prior. Total borrowings stood at S$1.6 billion, with 76 per cent hedged through interest rate swaps as at Jun 30. 

 

&lsquo Immediate&rsquo task to fill vacancies

Keppel DC Reit recorded a portfolio occupancy of 95.8 per cent, with portfolio weighted average lease by lettable area at 6.9 years.  

 

Loh said that the manager&rsquo s &ldquo immediate task&rdquo is to fill the vacancies in its assets. One of its tenants in KDC SGP 1 vacated in Q2, while another tenant in its Cardiff data centre will leave by mid-2026.

 

He said that the manager is on track to conclude a 30-year land lease extension for KDC SGP 1, which will take effect from the end of September 2025. 

 

&ldquo This extension will provide an opportune time for us to review our need for longer-term plans for the asset which is not a build-to-suit data centre,&rdquo said Loh. Such data centres are specifically designed for a tenant. 

 

He added that the vacant space in SGP 1 is attractive to potential tenants as it is a contiguous space. As it is not a build-to-suit data centre, there is also an opportunity for the manager to transform the space for other uses in the medium term.

 

On how quickly vacancies could be filled, he said it will take time to find tenants for the Singapore data centres, as the manager must ensure they match the available power capacity.

 

The manager will also &ldquo keep its options open&rdquo to alternative uses for the space in its Cardiff data centre.

 

While global macroeconomic conditions look uncertain amid shifting trade policies, the possibility of higher tariffs and persistent geopolitical tensions, industry fundamentals such as the rapid commercialisation of generative artificial intelligence is favourable for Keppel DC Reit, as the industry is poised for &ldquo robust growth&rdquo , said the manager of the Reit.