KEPPEL DC Reit said on Friday that it has bought a data centre in Milan, Italy, for EUR 37.3 million (S$57.3 million) as part of its Europe expansion.
The data centre comprises three interconnected four-storey buildings with a total lettable area of about 15,365 square metre (165,389 square feet). It is sited on 11,965 sqm (128,791 sq ft) of freehold land about eight kilometres away from the Milan city centre, which is easily accessible via the Milan Metro system. The facility was acquired from Riaz Valani, Sebastiano Rizzo and Faizul Lalji.
Keppel DC Reit said the data centre has been fully leased to one of the world's largest telecommunications companies, on a double-net lease structure for 12 years since January 2016. The lease provides for annual rental escalations and an option to renew for another six years.
"The acquisition is expected to be accretive to Keppel DC Reit's Distribution Per Unit and will enhance its income stream stability through geographical diversification,'' the Reit said.
The portfolio's weighted average lease expiry (WALE) will be lengthened from 8.7 years to 9.3 years, while the Reit's portion of master-leased facilities will be increased.
The acquisition will be fully funded by debt and is expected to be completed in the third quarter of 2016.
On completion, Keppel DC Reit's aggregate leverage is expected to increase to about 32.5 per cent from 29.1 per cent. Assets under management will increase to about S$1.13 billion, with total lettable area of about 70,912 sqm (763,298 sq ft) across 10 data centres, excluding maincubes Data Centre, which is under construction by the vendor in Germany and slated for completion in 2018.