Keppel DC REIT Buys 90% of Two Tokyo Data Centres from GIC-Equinix JV for JPY 190B
Keppel DC REIT and its sponsor Keppel Ltd are acquiring a 90% interest in two hyperscale data centres in Greater Tokyo from a joint venture of GIC and Equinix. The deal values the properties and their operating company at JPY 190 billion ($1.2 billion), with GIC selling its full 80% stake and Equini
Keppel DC REIT and its sponsor have agreed to acquire a 90 percent interest in two hyperscale data centres in Greater Tokyo from a joint venture of GIC and Equinix, in a deal valuing the properties and their operating company at JPY 190 billion ($1.2 billion). The Singapore-listed trust will take an 88.62 percent effective interest, while Temasek-backed Keppel Ltd will acquire 1.38 percent, according to a Tuesday announcement. US giant Equinix will retain 10 percent and remain as operator after the expected fourth-quarter completion, with public filings indicating that Singapore sovereign fund GIC is selling its full 80 percent interest in the two assets and Equinix is halving its stake.
The additions will nearly triple Japan’s contribution to Keppel DC REIT’s rental income to 23 percent from 9 percent and lift the trust’s assets under management to S$7.6 billion ($6 billion) from S$6.3 billion. The portfolio will grow to 27 data centres across 10 countries, with Singapore continuing to account for 60 percent of rental income. “This acquisition demonstrates our disciplined approach to acquiring quality assets with multiple avenues for value creation,” said Loh Hwee Long, CEO of Keppel DC REIT’s manager.
The five-storey co-location facilities, which the manager calls Tokyo Data Centre 4 and 5, correspond to Equinix’s TY12x and TY13x buildings in Inzai, a digital infrastructure hub in Chiba prefecture. The properties have a combined gross floor area of 403,128 square feet (37,452 square metres) and net lettable area of 163,294 square feet, with Keppel giving their completion dates as 2021 and 2024. The fully fitted centres are 100 percent occupied by four investment-grade internet and IT services clients, one of which leases space in both properties, according to the manager. Contracted rents rise by an average of 2.8 percent annually, while existing rents are estimated to be at least 30 percent below prevailing market levels.
Tokyo Data Centre 4 has a weighted average lease expiry of 4.5 years and Tokyo Data Centre 5 has a WALE of 10.6 years, producing a blended figure of 8.3 years. More than 5 percent of the properties’ income is due for renewal by 2029, creating an opportunity to capture increases that have lifted Tokyo market rents to JPY 20,500-JPY 30,000 per kilowatt per month from JPY 17,000-JPY 20,500 during 2021 to 2023, the manager said in an investor presentation.
GIC and Equinix formed their $1 billion-plus Japan venture in 2020 with an initial portfolio of two Tokyo projects and one Osaka facility. GIC took an 80 percent interest, while Equinix contributed its under-development TY12x and OS2x assets and rights to the second Tokyo project in exchange for 20 percent and cash proceeds. Equinix opened TY12x in March 2021 as its first Asian xScale facility, with the campus designed to support 54 megawatts at full buildout. The NASDAQ-listed operator launched adjacent TY13x’s initial 8MW phase in June 2023, with the second facility planned to provide 36MW upon full completion.
Keppel did not name the vendors, describing them only as a global institutional investor and an established data centre owner and operator. Equinix’s June 2026 filing continued to show a 20 percent interest in the venture, indicating that GIC is selling its full 80 percent interest in the two properties and Equinix is transferring 10 percentage points while retaining the balance. A Keppel DC REIT spokesperson said the manager was unable to disclose the seller’s identity due to confidentiality reasons. Equinix did not respond to Mingtiandi’s request for comment, while GIC declined to comment.
Keppel DC REIT plans to fund the S$1.39 billion total acquisition outlay with S$591.1 million from a private placement, S$788.6 million of yen-denominated debt and S$11.7 million of units issued to the manager as an acquisition fee. The trust has launched the placement to raise gross proceeds of at least S$600 million. The financing is expected to lift aggregate leverage to 38 percent from 34 percent, or 39 percent including temporary debt for refundable consumption tax. The acquisition is projected to increase pro forma distribution per unit by 2.6 percent and net asset value per unit to S$1.75 from S$1.71, while three new clients will reduce the largest tenant’s share of rental income to 38.2 percent from 43.5 percent.
