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The acquisition, valued at JPY 82.1 billion (~S$707 million), will give KDCREIT a 98.47% stake in the asset, with Keppel Ltd holding the rest. Tokyo Data Centre 3 is a newly built, five-storey hyperscale facility in Greater Tokyo, fully leased to a global hyperscaler under a 15-year contract with annual rent escalations. Strategically located with low-latency connectivity, the centre enhances KDCREIT’s position in one of Asia-Pacific’s most robust data centre markets.
Financially, the deal is attractive. It is priced at a 1.1% discount to independent valuation and is expected to be yield-accretive, lifting FY2024 pro forma distribution per unit (DPU) by 2.8% to 9.712 cents. Aggregate leverage will rise from 30.0% to 34.5%, but the balance sheet remains healthy with about S$559 million debt headroom. Portfolio metrics also improve, with occupancy increasing to 95.9% and weighted average lease expiry extending to 7.2 years.
The preferential offering will raise about S$404.5 million via 180.56 million new units at S$2.24, a 6.7% discount to the S$2.40 closing price on 2 October 2025. At current levels, KDCREIT offers a 4.2% historical yield and trades at a price-to-book of 1.54x.
For existing unitholders, the offering provides an opportunity to accumulate units at a discount while benefiting from exposure to a stable, income-generating freehold asset. Given the accretive nature of the deal and strong tenant profile, subscribing appears attractive for long-term investors.
Opinion:
I've owned Keppel DC since 2017. There have been 2 such exercises so far I recall.
It's one of the best performing REITs in my portfolio.
I think it's worth investing as a unit holder too. DYOD.
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