A trustee of Keppel DC Reit has entered into a conditional share purchase agreement with Keppel Data Centres Holding to acquire a 90 per cent stake in Keppel DC Singapore 3.
The proposed deal, valued at about $202.5 million, will be funded via the net proceeds of a fully underwritten preferential offering of 242 million new units, on the basis of 274 new units for every 1,000 existing Keppel DC Reit units held as at 5pm, Oct 25, said the manager of the real estate investment trust (Reit) yesterday. The issue price of $1.155 per unit represents a discount of about 5 per cent to the volume weighted average price per unit yesterday, before the announcement was made.
The manager said the proposed acquisition is expected to be accretive to the Reit's distribution per unit, and will expand its portfolio assets under management from $1.14 billion to $1.35 billion, comprising 11 data centres globally.
Separately, Keppel DC Reit posted a 15.9 per cent rise in distributable income available to $16.8 million for the third quarter to Sept 30, over the $14.5 million from the same period a year ago.
Distribution per unit came in at 1.9 cents - 15.9 per cent higher than the 1.64 cents previously. The Reit has distributed 3.34 cents per unit for the first half of this year. No distribution was declared for the quarter. Net property income rose 6.2 per cent to $22.7 million, although gross revenue fell 12 per cent to $22.7 million. Earnings per unit was up at 2.38 cents, over the 1.91 cents previously. Net asset value per unit slipped to 88.9 cents as at Sept 30, down from 92.1 cents as at Dec 31.
AT A GLANCE
NET PROPERTY INCOME: $22.7 million (+6.2%)
AVAILABLE INCOME FOR DISTRIBUTION: $16.8 million (+15.9%)
DISTRIBUTION PER UNIT: 1.9 cents (+15.9%)
Portfolio occupancy rate rose to 92.7 per cent and weighted average lease expiry remained healthy at 8.6 years following leasing progress during the quarter.
The manager acknowledged that the increasing data centre space in Singapore is expected to exert near-term pressure on rental rates, but said it continues to be confident of the market's long-term potential.
The proposed acquisition of Keppel DC Singapore will "strengthen the Reit's foothold in the high-potential market and provide greater income resilience with an expanded portfolio", the manager added.
Keppel DC Reit units closed two cents or 1.7 per cent up at $1.225 yesterday before the results were out.