Keppel DC Reit and its sponsor Keppel have agreed to acquire a combined 90% effective interest in two freehold hyperscale data centres in Inzai City, Greater Tokyo, named Tokyo Data Centre 4 and Tokyo Data Centre 5, the companies said today [1, 2, 3]. The total purchase price was reported variably, ranging from 171 billion yen (about US$1.1 billion) to 190 billion yen (around US$1.2 billion), with one source estimating up to S$1.5 billion (approximately US$1.5 billion) for the full acquisition [1, 2, 4, 5]. Keppel DC Reit will pay about 168.4 billion yen for its share of the purchase [1, 2, 3].
Upon completion in the fourth quarter of 2026, Keppel DC Reit will hold an 88.62% effective interest, while Keppel will own 1.38%, and the remaining 10% will be retained by an existing unnamed global data centre operator [1, 2, 3, 4]. CEO Loh Hwee Long highlighted the acquisition’s benefits, saying, "In addition to immediate distribution per unit (DPU) accretion, Tokyo Data Centres 4 and 5 provide embedded growth through contracted rent escalators and meaningful potential reversion opportunities, while further deepening our exposure to the Japan data centre market" [1, 4].
The data centres are fully leased to four investment-grade internet and IT service clients, three of which are new to Keppel DC Reit's portfolio [3]. They feature weighted average lease expiry of 4.5 years for Data Centre 4 and 10.6 years for Data Centre 5 [2, 3]. In-place rents are estimated to be at least 30% below current market rents, with average annual rent escalations near 2.8% [2, 3, 6].
Keppel DC Reit launched a private placement on September 10 to partly fund the acquisition. Initially set to raise S$600 million, the placement was upsized to S$625 million after strong demand. About 297.6 million new units were issued at S$2.10 per unit, roughly a 4.4% discount to recent trading prices [2, 6, 5].
The acquisition is expected to be immediately accretive to distribution per unit, with an estimated 2.6% DPU increase for the 2025 financial year on a pro forma basis [2, 3, 6, 4]. Following the acquisition, Japan's share of Keppel DC Reit's portfolio rental income will rise from about 9% to 23%, while the largest client’s contribution will fall from 43.5% to roughly 38.2% [1, 3].
The private placement units began trading on the Singapore Exchange on September 10, marking a key step in completing the acquisition [2, 6, 5]. The transaction is expected to close in the fourth quarter of 2026 [2, 3, 6, 4].
