The manager of Keppel DC REIT says it intends to raise between $200.1 million and $204.3 million through the proposed private placement of 81 million new units.

The proposed amount of new units to be placed represents around 5% of the total number of units currently in issue.

The new units will be issued at a price of between $2.47 and $2.522 per new unit, or a discount of between 2.0% and 4.0% to the volume weighted average price (VWAP) of $2.5742 per unit for trades done on Aug 11.


See also: Analysts mixed on Keppel DC REIT's 1Q results


The issue price will be determined by the manager and the joint bookrunners and underwriters, Citigroup Global Markets, DBS Bank, OCBC and Credit Suisse Singapore.

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Of the proceeds, the manager says it intends to use $67.9 million to partly fund the proposed acquisition of a data centre property at No. 5 Bluesea Intelligence Valley in China’s Guangdong province.

The manager says the acquisition would anchor the REIT’s entry into China, which is currently the second largest data centre market globally and the largest growing data centre hub in Asia. It would also increase the geographical diversification of the REIT to nine countries around the world.

Another $128.6 million will go to funding future acquisitions and repaying debt to create debt headroom for future acquisitions.

Finally, some $3.6 million will pay the estimated fees and expenses related to the private placement.

The balance – if any – will go towards the REIT’s general corporate or working capital purposes.

Following the private placement, the REIT’s aggregate leverage will be reduced from 36.7% as at June 30, to 34.7%.

Units in Keppel DC REIT closed 3 cents lower or 1.2% down at $2.57 on Aug 11.