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Keppel DC REIT - OCBC Investment 2016-08-12: Acquisition of data centre in Milan

Keppel DC REIT - OCBC Investment 2016-08-12: Acquisition of data centre in Milan KEPPEL DC REIT AJBU.SI

Keppel DC REIT - Acquisition of data centre in Milan

  • Keppel DC REIT (KDCREIT) announced that it has entered into a share purchase agreement to acquire a data centre located at Via Bisceglie 71, 73, 75, Milan, Italy, for an agreed property price of EUR37.3m (~S$57.3m). 
  • This asset is a four- storey freehold property with a total lettable area of 15,365 sq m and is currently leased to one of the world’s largest telecommunications companies until 31 Dec 2027. 
  • The lease shall be renewed for an additional six-year term thereafter unless the client notifies the landlord otherwise. 
  • KDCREIT, being the purchaser, will also be granted a rent top-up for the period from the completion date or 30 Sep 2016, whichever is earlier, to 31 Dec 2018. 
  • The expected date of completion is in 3Q16. Upon completion, KDCREIT’s portfolio WALE would be lengthened further from 8.7 years to 9.3 years
  • On a pro forma basis, assuming the acquisition is funded fully by debt, KDCREIT’s FY15 DPU would have increased by 2.6% from 6.51 S cents to 6.68 S cents. 
  • We maintain our BUY rating and S$1.27 fair value estimate for now.




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2016-08-12
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.270 Same 1.270


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