This article is from the Australian Property Journal archive
ASIA's first data centre property trust, the Singapore Exchange-listed Keppel DC REIT has paid $43.3 million for the Intellicentre in Sydney.
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This is trust`s first acquisition five months after its IPO.
Keppel DC REIT has bought the Intellicentre 2 from Macquarie Telecom, which consists a Tier III carrier-neutral data centre.
Completed in 2012, the data centre has a total lettable area of 8,169 sqm and sits on approximately 20,000 sqm of freehold land.
As part of the deal, Macquarie Telecome will sign a 20-year triple-net lease agreement with Keppel DC REIT. MT will also continueto manage the facility and be responsible for all property-related outgoings.
With this acquisition, the trust`s overall portfolio Weighted Average Lease Expiry (WALE) will increase to 9.2 years and portfolio risk will be lowered through tenant diversification.
Keppel DC REIT CEO Chua Hsien Yang 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.
IC2 will boost the trust`s portfolio to nine assets and will be its third in Australia, including the iSeek Data Centre in Brisbane and Gore Hill in Sydney`s north-west. Keppel DC REIT now has an assets under management of approximately S$1.07 billion.
According to Frost & Sullivan, Australia’s data centre services market is expected to grow at a compounded annual growth rate of 13.9% from 2013 to 2020.
The acquisition will initially be fully funded by debt and is expected to be completed in the third quarter of 2015. Upon completion, Keppel DC REIT’s aggregate leverage is expected to increase from 26.7% to approximately 29.9%.
Australian Property Journal
