JAPAN; SINGAPORE —Singapore’s data center real estate investment trust, Keppel DC REIT, has finalized agreements to acquire an 88.62% effective stake in two operating hyperscale data centers in Greater Tokyo for JPY 190 billion. Located in Inzai City, Tokyo Data Centre 4 and Tokyo Data Centre 5 offer combined gross floor space exceeding 403,000 square feet. The transaction values the properties at a 2.1% discount to their independent valuation of JPY 194 billion. The effective purchase consideration for the REIT stands at JPY 168.4 billion, funded through a combination of 57% Japanese yen-denominated debt and 43% equity financing. Completion of the deal is expected in the fourth quarter of 2026, subject to regulatory filings under Japan's Foreign Exchange and Foreign Trade Act.
Keppel DC REIT is Asia’s first pure-play data center real estate investment trust listed on the Singapore Exchange, managing a diversified portfolio of high-specification data center assets across Asia-Pacific and Europe. The acquiring consortium includes its sponsor’s subsidiary, Keppel Japan, while the seller-operator retains a 10% stake in the assets to maintain operational continuity.
This strategic transaction significantly deepens institutional real estate investment in Japan, which remains the largest data center market in Asia-Pacific outside China. Inzai City serves as a core hyperscale cluster, but faces increasing power supply limitations and construction bottlenecks that restrict new development. Acquiring fully operational, revenue-generating infrastructure in this supply-constrained market allows institutional investors to secure stable, long-term yield backed by structural tailwinds such as enterprise cloud migration, digital transformation, and artificial intelligence workloads.
The acquisition substantially shifts the REIT’s geographic revenue balance, increasing Japan’s contribution to total portfolio rental income from 9% to 23%, while Singapore remains the anchor market at 60%. Both facilities are fully leased to four investment-grade clients with built-in annual rent escalations averaging 2.8% and a combined weighted average lease expiry of 8.3 years. Because existing contract rents are estimated to be at least 30% below current market rates, the portfolio holds significant upside potential upon lease renewals. Financed largely through low-cost yen debt, the accretive acquisition increases the trust's aggregate leverage to approximately 38.0% while extending its average debt tenor to 3.4 years.
