Keppel DC Reit units start trading on a strong note

Singapore

KEPPEL DC Reit made a strong debut on the Singapore Exchange mainboard on Friday, with its units rising as much as 5.9 per cent to hit an intra-day high of 98.5 Singapore cents.

The counter started at 98 cents - against the offer price of 93 cents - when trading commenced at 2pm. It closed at 96.5 cents - up 3.8 per cent - after 105 million units changed hands, making it the day's most actively traded counter.

Keppel DC Reit, the first data centre real estate investment trust to be listed in Asia, saw strong demand in its initial public offering of 261.1 million units.

The public tranche was 9.6 times subscribed while the placement portion was 24.4 times subscribed.

The Reit raised S$512.9 million from the offering and the cornerstone units, making it the largest Reit IPO on SGX year-to-date.

Keppel DC's portfolio comprises eight data centre properties in Asia-Pacific and Europe. "The strong reception is testimony to the appeal of the asset class," said Jeremy Sng, executive director, equity capital markets, Standard Chartered Bank, one of the key joint book runners.

Due to strong demand, the units were priced at the top end of the offering price range. Investors can expect a distribution yield of 6.8 per cent in Forecast Year 2015 and 7.1 per cent in Projection Year 2016

Chua Hsien Yang, CEO of Keppel DC Reit Management, said the Reit "would provide an opportunity for investors to ride the global growth in data creation and Internet traffic".

Meanwhile, Keppel Land said that it had completed the divestment of its stakes in two property assets - located in Serangoon North and Tampines respectively - to Keppel DC Reit. Keppel Land received net proceeds of about S$96 million and will recognise a gain of about S$65.9 million.