Keppel Corporation plans to divest two AI-ready hyperscale data centers to its real estate investment trust, Keppel DC REIT, in a deal valued at S$1.38 billion (US$1.03 billion). This transaction is poised to be one of the largest data center deals in Southeast Asia.
The joint venture between Keppel’s Connectivity Division and Cuscaden Peak Investments currently owns the data center campus in Singapore. The campus houses two operational data centers and a vacant land plot designated for future development. While the two existing data centers will be transferred to Keppel DC REIT, the vacant land plot will be subleased to Keppel’s private funds for the construction of a third data center.
Following the divestment, Keppel DC REIT will assume full ownership of the two data centers. However, Keppel will retain operational and facility management responsibilities for both. Keppel’s estimated share of the total gross divestment price is approximately S$280 million. The transaction is projected to be finalized by the end of 2025.
This acquisition will significantly bolster Keppel DC REIT’s asset base, increasing its assets under management by 36% to S$5.2 billion. The REIT will now oversee a portfolio of 25 data centers across Asia Pacific and Europe.
Keppel DC REIT CEO Loh Hwee Long expressed optimism about the deal, stating that it will enhance the portfolio’s income resilience and capitalize on potential rental uplifts and capacity expansion. The acquisition is expected to generate strong positive cash flows and immediately contribute to higher distribution per unit.
In a separate announcement, Keppel DC REIT revealed plans to raise S$1 billion through a private placement and preferential offering. The target price range for the new units is set between S$2.074 to S$2.128 for the private placement and S$2.03 to S$2.08 for the preferential offering.
