Keppel DC REIT acquires Sydney data centre for $45 million

SINGAPORE - Keppel DC REIT has acquired the shell and core building Intellicenter 2 (IC2) of Macquarie Telecom in Sydney for an estimated A$43.3 million (S$45.87 million), its maiden acquisition five months after its listing.

The IC2 is a carrier-neutral data centre located within the Macquarie Business Park, a research and business park in Sydney that specialises in the communications and information technology sectors.

It has a total lettable area of 8,169 square meter and sits on approximately 20,000 sqm of freehold land.

Macquarie Telecom (MT) will sign a 20-year triplenet lease agreement with Keppel which includes a mechanism for annual rental escalation and options to extend the lease. MT will also manage the facility and be responsible for all property-related outgoings.

With this acquisition, the overall portfolio Weighted Average Lease Expiry (WALE) will increase to 9.2 years and portfolio risk will be lowered through tenant diversification.

Mr Chua Hsien Yang, CEO of Keppel DC REIT said, "Sydney is a prominent data centre hub given its strong data centre ecosystem with established telecommunication infrastructure, skilled IT resources, geological and political stability, as well as a high concentration of multinational corporations.

"This acquisition builds on Keppel DC REIT's established track record in Sydney and expands its footprint in Australia. Keppel DC REIT will be well-positioned to tap the market's growth potential," he added.

According to Frost & Sullivan, Australia's data centre services market is expected to grow at a compounded annual growth rate of 13.9 per cent from 2013 to 2020. Their latest survey revealed that over three-quarters of organisations that utilise a data centre are using an outsourced provider.

The inclusion of IC2 will bring Keppel DC REIT's portfolio to comprise nine quality data centres strategically located in key data centre hubs across Asia Pacific and Europe, with an assets under management value of approximately S$1.07 billion.