DXC Technology Services faces legal action over alleged payment default at Keppel DC Reit property
THE master lessee at Keppel DC Singapore 1, one of Keppel DC Reit's data centre, has commenced legal proceedings against tenant DXC Technology Services Singapore (DXC) over the latter's partial default of payment in relation to colocation services provided at its data centre in Serangoon North. (see Amendment note)
The amount being disputed is approximately S$14.8 million for the 4-year period between Apr 1, 2021 and Mar 31, 2025, the real estate investment trust (Reit) manager said in a bourse filing on Monday (Mar 21).
DXC has disputed their liability to make payment.
The tenant occupies about 0.4 per cent of Keppel DC Reit's total attributable lettable area as at 31 Dec, 2021, and the impact arising from the disrupted sum per annum is approximately 2 per cent of Keppel DC Reit's distributable income for the financial year ended Dec 31, 2021.
The Reit manager said it does not believe the legal dispute to have a material impact on Keppel DC Reit's overall financial performance.
The master lessee and appointed facility manager of the data centre, located on 25 Serangoon North Avenue 5, is Keppel DC Singapore Ltd (KDC).
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"While KDC, together with the manager and DXC, have engaged in various commercial discussions and mediations, the parties have not been able to arrive at a mutually acceptable resolution," said the Reit manager.
The manager added that further updates will be provided as and when there are material developments in the legal proceedings.
Units of Keppel DC Reit closed at S$2.28, up S$0.02 or 0.9 per cent, on Monday.
Amendment note: An earlier version of this story stated Keppel DC Reit has commenced legal proceedings against DXC Technology Services Singapore. It should be Keppel DC Singapore 1 which commenced legal proceedings. The story has been updated to reflect this.
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