Singapore’s Keppel Telecommunications and Transportation Ltd (Keppel T&T) has begun pre-marketing the initial public offering (IPO) for its data centres, and plans to raise about S$540 million ($432 million).
Keppel DC Reit will sell about 70% of its enlarged share capital with parent firm, and plans to use about half the proceeds to subscribe to units of this real estate investment trust (REIT). Keppel T&T will own the remaining 30%.
Keppel T&T is a unit of Singapore conglomerate Keppel Corp and the REIT will allow the company to finance its own expansion plans without having to depend on its parent company. This will also the second REIT that is being listed by Keppel Corporation, and about a decade ago, it had floated Keppel REIT on the Singapore exchange.
This also marks the first IPO of a datacentre trust in Asia, outside Australia, and the Reit will launch with eight centre properties in Asia-Pacific and Europe: Keppel Digihub and Keppel Datahub 1 in Singapore; Gore Hill Data Centre in Sydney and iseek Data Centre in Brisbane; Basis Bay Data Centre in Selangor; GV7 Data Centre in London; Almere Data Centre in Amsterdam and Citadel 100 Data Centre in Dublin.
The company has said it does not plan to undertake an aggressive expansion following its initial public offering, but may instead look at collaborating with owners of similar facilities, or even, manage such centres on a revenue share basis.
Singapore is a preferred destination for listing of REITs as rules here mandate that companies that opt for trust listings here offer higher yields.