Keppel DC REIT (KDC REIT), on Sept 3, announced that it has acquired the remaining stakes in Keppel DC Singapore 7 and Keppel DC Singapore 8 (KDC Singapore 7 and 8) from Keppel.
The REIT’s trustee, Perpetual (Asia) Limited, exercised the call option and entered into a sale and purchase agreement (SPA) with Keppel Griffin to acquire the remaining 51.0% of the shares in Memphis 1. Memphis 1 holds KDC Singapore 7 and 8. Keppel Griffin is an indirect wholly-owned subsidiary of Keppel.
According to KDC REIT, the acquisition has been completed and it now holds 100% interest in Memphis 1 and in turn, the data centres.
The consideration, which is up to approximately $8.4 million, is subject to completion adjustments.
Of the sum, $6.6 million is payable once the call option is completed. This comprises 51% of the adjusted net adjusted value (NAV) of Memphis 1, representing 0.51% of the economic interests of the properties. It also includes an amount that’s equivalent to the outstanding principal amounts of the notes issued by Memphis 1 and registered under Keppel Griffin. This also includes up to $1.8 million payable subsequently following the completion of the call option if there is a lease extension of 10 years under the master agreement.
Based on the latest valuations by Knight Frank, the properties’ assessed combined market value was $1.05 billion as at May 1. Based on valuations by Savills, the properties’ assessed combined market value was $1.06 billion.
See also: Princeton Digital swaps diesel for biofuel in its Indonesia data centres
With the agreed aggregated property value being at $1.03 billion and the JTC land premium being $16.3 million paid by Memphis 1 for the initial leasehold term, the call option property price without lease extension was fixed at $1.05 billion, given that it is lower than the average market valuations provided.
The consideration payable by KDC REIT will be funded by debt and/or existing cash.
Units in KDC REIT closed 3 cents lower or 1.28% down at $2.32 while shares in Keppel closed 6 cents lower or 0.69% down at $8.64 on Sept 3.
