Keppel T&T's data-centre Reit set for Dec 12 listing

by Tan Liang Tuan Gigi 11 Nov 2014

THE first real estate investment trust comprising data centres will be listed here next month and promises to be one of the largest and most highly anticipated initial public offerings of the year.

Keppel Telecommunications and Transportation (Keppel T&T) aims to list Keppel DC Reit on Dec 12 once it has won shareholder backing at an extraordinary general meeting on Nov 25. The offering is estimated at $811 million, according to a circular released yesterday to the bourse.

Keppel T&T has received a letter of eligibility to list.

It will also ask shareholders to support a proposal to divest its interests in Keppel Digihub, Keppel Datahub 1, Gore Hill Data Centre and Citadel 100 Data Centre, and inject them into the Reit.

The divestment of these four properties is expected to raise $505.4 million in gross proceeds.

About half of this amount - $244.1 million - will be used to subscribe for units in the new Reit, in which Keppel T&T, a logistics, data-centre services and investment firm, will hold a 30 per cent stake.

The Reit will start with eight data-centre properties in the Asia-Pacific and Europe: Keppel Digihub and Keppel Datahub 1 in Singapore; Gore Hill Data Centre in Sydney, Australia, and iseek Data Centre in Brisbane, Australia; Basis Bay Data Centre in Selangor,Malaysia; GV7 Data Centre in London, Britain; Almere Data Centre in Amsterdam, the Netherlands; and Citadel 100 Data Centre in Dublin, Ireland.

It will be managed by Keppel DC Reit Management, a wholly owned unit of Keppel T&T.

News about the listing galvanised the company's stock to a six-year high of $1.87 in January when it was first announced.

A data centre is a facility that centralises an organisation's IT operations and equipment, and where it stores, manages and disseminates its data.

There has been a surge in demand for data centres, driven by growth in e-commerce, cloud computing and big data, said Keppel T&T chief executive Thomas Pang. The proposed mainboard listing "is poised to capitalise on these trends", he added.

Keppel T&T will continue to look out for opportunities to develop data-centre assets across its target markets of the Asia-Pacific and Europe after the transaction, the company stated yesterday.

Keppel T&T has had to rely on its parent, Keppel Corp, for funding up to now, so the Reit would allow it to finance more of its own expansion, said CIMB analysts Jessalynn Chen and Kenneth Ng in a September report.

The listing would also allow the company to realise the full market value of its data centres.

Still, the company "has been careful and measured in its expansion plans" so far, they noted.

Therefore, aggressive investments in the data-centre space are not expected even after the listing, though Keppel T&T may collaborate with other data-centre owners or managers to co-invest in new properties.


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