Keppel DC Reit’s private placement upsized to S$625 million after ‘strong demand’

[SINGAPORE] Keppel DC Reit’s private placement to partially fund the majority acquisitions of two Japan data centres has been upsized from S$600 million to S$625 million on “strong demand” from investors, its manager said on Wednesday (Sep 2).

DBS, OCBC, Jefferies Singapore and UOB were the joint bookrunners and underwriters for the private placement, which closed on Tuesday. The demand came from new and existing unitholders globally; they consisted of institutional investors and accredited investors, said the real estate investment trust’s (Reit) manager.

The placement was about 3.4 times covered, with a majority of the new units allocated to long-only investors and real estate specialists, added the manager.

The issue price per new unit has been fixed at S$2.10, it said. This is about a 4.4 per cent discount to the volume-weighted average price of S$2.1974 of existing units’ trades on Monday. A total of 297.6 million new units will be issued – up from the initially planned 280.1 million units.

About S$615.8 million will partially finance the acquisitions of nearly all of Tokyo Data Centre 4 and Tokyo Data Centre 5 – two freehold, hyperscale fully fitted co-location data centres in Inzai City in Greater Tokyo.

Keppel DC Reit and Keppel on Tuesday said that they have indirectly agreed to collectively buy 90 per cent stakes in the two data centres for about 171 billion yen (US$1.1 billion).

About S$9.2 million from the private placement will go towards the estimated fees and expenses, including professional fees and expenses, incurred or to be incurred by Keppel DC Reit in connection with the placement.

DBS has been allocated, on a proprietary basis, one million of the new units under the private placement, added the Reit manager.

All of the new units will begin trading on Sep 10.

Units of Keppel DC Reit closed flat at S$2.20 on Monday, before the manager called for a trading halt before the market opened on Tuesday. The counter resumes trading on Wednesday.