SINGAPORE - Mainboard-listed Keppel Telecommunications & Transportation Ltd (Keppel T&T) said on Thursday that its 70:30 joint venture with Keppel Land, Keppel Data Centres Holding Pte Ltd (KDCH), plans to develop a fourth data centre in Singapore.
KDCH has signed a conditional agreement, through its wholly-owned subsidiary, Keppel Datahub 3 Pte. Ltd, to buy a light industrial property at 20 Tampines Street 92 for $20 million from Mapletree Logistics Trust.
The property consists of two warehouse blocks with ancillary office space. It has a gross floor area of approximately 9,251 square metres on a land site of approximately 6,804 square metres.
Keppel T&T said the proposed greenfield data centre development would be strategically located near existing data centres that Keppel Data Centres operates at Tampines, which are Keppel Datahub 1 and Keppel Datahub 2.
When completed, the proposed facility will have about 183,000 square feet of gross floor area, making it Keppel's second-largest data centre in Singapore after Keppel Digihub, Keppel T&T said.
Construction will be undertaken in three phases with phase 1 core and shell construction and fit-out of the facility expected to be completed by 2016.
Said Keppel T&T CEO Thomas Pang: "Data centre utilisation rates in Singapore have been consistently high, reflecting the country's status as a data centre hub in the region. This demand is expected to grow, led by the outsourced data centre requirements of multinational companies, banks and financial institutions."
According to BroadGroup, data centre utilisation rates in Singapore have remained steadily close to 85.5 per cent. It is estimated that increased demand from financial institutions will further push utilisation rates to 92.1 per cent by 2018.
The proposed acquisition is not expected to have material impact on the net tangible assets or earnings per share of Keppel T&T for the current financial year.
In a separate statement, mainboard-listed Mapletree Logistics Trust said that the average age of the two buildings for sale was 19 years, adding that they were "designed with specifications that are no longer able to meet today's modern warehousing requirements."
"As the site is small with limited potential to redevelop into a modern specifications warehouse, we would prefer to recycle the capital released from its divestment into better quality and higher yielding logistics assets," said the trust manager's chief executive officer, Ms Ng Kiat.