Keppel DC REIT, a Singapore-based data center REIT, today announced that it has agreed to acquire Guangdong Data Centre, a fully-fitted data center facility in the city of Jiangmen, Guangdong Province, China, from Guangdong Bluesea Data Development (Bluesea) and its parent company, Guangdong Bluesea Mobile Development. Specifically, Keppel DC REIT is paying $98.4m (RMB636m) to Bluesea for the facility.
Keppel DC REIT’s agreement with Bluesea takes the form of a sale-and-leaseback transaction. Indeed, the facility will be 100% leased back to Bluesea, on a triple net basis (excluding certain real estate taxes), for 15 years.
Finally, the transaction will close in Q3 2021. At this time, Keppel DC REIT intends to fund the purchase consideration through a combination of debt and/or equity.
Guangdong Data Centre – Overview
Keppel DC REIT is acquiring the seven-story data center, which has gross floor area (GFA) of 222k sqft (20.6k sqm). In terms of land tenure, the site is held leasehold with ~46 years of remaining term.
The Guangdong Data Centre is situated within the Bluesea Intelligence Valley Mega Data Centre Campus. Indeed, this facility is the first of six data center buildings that Bluesea will develop at this campus. As part of its agreement with Bluesea, Keppel DC REIT will have a right of first refusal (ROFR) to acquire the remaining five data centers within the campus in Jiangmen, Guangdong, China.
Greater Bay Area – Jiangmen, Guangdong
The Guangdong Data Centre is located within the Greater Bay Area, which refers to the Guangdong-Hong Kong-Macau area. Specifically, the area consists of the cities of Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou, and Zhaoqing, as well as the special administrative regions (SARs) of Hong Kong and Macau.
The Greater Bay Area has a strong economic backdrop and ecosystem of startups, incubators, and accelerators in various industries. Notably, the region has several of China’s Fortune Global 500 companies and many of the country’s top technology firms.
Amongst China’s provinces, Guangdong has the highest share of hyperscale data centers, commanding 20%+ of the market. Overall, China is the second largest data center market globally as well as the largest market in the Asia-Pacific region.
Competitors in the Greater Bay Area
China’s largest carrier-neutral data center operators including GDS Holdings, 21Vianet Group, and Chindata Group are all active in the Greater Bay Area. Specifically, the companies have the following capacity in the region:
- GDS Holdings: 13 self-developed data centers. Overall, GDS’ total capacity includes 743k sqft (69.0k sqm) of area in service and 286k sqft (26.6k sqm) of area under construction. Additionally, the company has 1.5 million sqft (141k sqm) of area held for future development
- 21Vianet Group: 5 self-built data centers with 9.3k cabinets of power capacity
- Chindata Group: 1 wholesale data center with 5 megawatts of power capacity
Keppel DC REIT – Overview
With the acquisition of Guangdong Data Centre, Keppel DC REIT will have a portfolio of 20 data centers across Asia-Pacific and Europe. Notably, this acquisition represents Keppel DC REIT’s first data center acquisition in China.
Post-acquisition, Keppel DC REIT’s portfolio occupancy rate will increase from 98.0% to 98.2%. Additionally, the company’s weighted average lease expiry (WALE) will increase from 6.5 years to 7.3 years.