SINGAPORE (THE BUSINESS TIMES) - Keppel DC Reit said on Thursday (Dec 12) it will be acquiring its second data centre in Germany for 81.8 million euros (S$125.3 million). This will be its eighth data centre in Europe.
The real estate investment trust is buying the entire freehold interest in the shell and core purpose-built data centre from Maena KG, and the deal is expected to be completed in 2020. The Reit said the buyout would likely be fully funded by debt.
The property has a total lettable area of about 540,869 square feet and is fully leased on a triple-net basis until end-2025. It is located near Frankfurt Airport and about 18 kilometres from Frankfurt's city centre.
The property's market value is 86 million euros, according to independent valuation firm Jones Lang Lasalle's valuation, which used both income capitalisation and discounted cash flow methods.
Keppel DC Reit added that the proposed acquisition is expected to be accretive to its distribution per unit.
Post-acquisition, the Reit's portfolio occupancy rate will rise to 96 per cent, from 94.5 per cent as at Sept 30 on a pro-forma basis, assuming the Keppel DC Singapore 4 and DC1 acquisitions were completed on Sept 30.
The Reit's aggregate leverage is expected to increase from 30.3 per cent to 33.6 per cent after the acquisition is completed.
Chua Hsien Yang, chief executive of Keppel DC Reit's manager, said the addition of the data centre will strengthen the Reit's foothold in Germany. Frankfurt is home to the world's largest Internet exchange, DE-CIX.
With the proposed acquisition, assets under management by the Reit is expected to increase to $2.7 billion comprising 18 data centres.
Keppel DC Reit units closed at $2.00 on Wednesday, down 1.5 per cent or three cents before the announcement.