Keppel has received conditional approval from the relevant authorities for a 10-year land tenure lease extension until 15 July 2050 for the Keppel Data Centre Campus at Genting Lane in Singapore.
This forms part of the divestment of the two AI-ready hyperscale data centres — Keppel Data Centre Singapore (KDC SGP) 7 and KDC SGP 8 — in the Keppel Data Centre Campus to Keppel Data Centre (DC) REIT.
CEO of the manager of Keppel DC REIT Loh Hwee Long said, “The additional decade of land tenure for KDC SGP 7 and 8 positions Keppel DC REIT to capture the growing demand in Singapore’s highly supply-constrained data centre market.”
Following the lease extension for KDC SGP 7 and 8, and the acquisition of the remaining interests in KDC SGP 3 and 4, Keppel DC REIT’s portfolio assets under management (AUM) will increase by approximately 8.5% from $5.7bn to $6.2bn.
“This extension, coupled with targeted asset enhancement initiatives (AEIs), will reinforce portfolio resilience and unlock growth opportunities, strengthening our ability to deliver sustainable returns,” Loh added.
As part of the transaction announced in November 2024, Keppel DC REIT will pay the final sum of S$350m — out of the total sale consideration of $1.38bn — to the sellers, a joint venture between Keppel’s Connectivity Division and Cuscaden Peak Investments (Keppel JV), for securing the 10-year land tenure lease extension.
Keppel’s share of the $350m is approximately $70.9m, based on its effective stake in the Keppel JV, which includes both its interests in the joint venture (JV) and indirect interests via Alpha Data Centre Fund.
Separately, Keppel will leverage the extended land lease to advance KDC SGP 9, the third data centre in the campus. KDC SGP 9 will be developed by Keppel together with Keppel Data Centre Funds II and III, further bolstering the group’s pipeline of AI-ready data centres to meet evolving customer needs.