Keppel sells data centres in SGD $1.38 billion deal

Keppel has confirmed the divestment of two AI-ready hyperscale data centres at its Keppel Data Centre Campus in Singapore to Keppel DC REIT for a total of SGD $1.38 billion, marking one of the largest data centre transactions in Southeast Asia.

The divestment deal encompasses Keppel's share of approximately SGD $280 million from the total gross divestment considering their stake in the Keppel-led joint venture. This price is based on the exercise of a call option and includes additional considerations should a 10-year land tenure lease extension be granted.

Following the divestment, Keppel will continue to generate recurring income through the asset management as well as the operation and maintenance of the two centres. The company also intends to develop a third centre at the campus using its private funds.

Keppel DC REIT's acquisition is significant as it is expected to result in DPU accretion of 8.1%, thereby increasing its Assets Under Management (AUM) by 36% to reach approximately SGD $5.2 billion, assuming further potential from rental increases and capacity expansion. This compares to an AUM of SGD $4.9 billion excluding the lease extension.

The transaction signifies a considerable expansion for Keppel DC REIT within Asia's leading data centre hub. The divestment price includes an additional amount of SGD $350 million to be paid should the relevant authorities approve a lease extension for a further decade.