Keppel DC REIT has confirmed the sale of its Kelsterbach Data Centre near Frankfurt, Germany, to an undisclosed buyer for €50 million. The deal is expected to close in the first half of 2025, subject to regulatory approvals.
Originally acquired in 2019 for €81.8 million, the property is being sold at a 39 percent discount. This reflects broader shifts in data centre valuations across Europe and supports the REIT’s ongoing strategy of capital recycling and reinvestment in higher-yield assets.
Key Details of the Kelsterbach Facility
- Location: Near Frankfurt’s business district
- Components: A five-storey shell and core data centre and a six-storey office block
- Size: 50,250 square meters (540,870 sq ft) of gross floor area
- Built: 1989, with limited modernisation
The asset no longer fits the REIT’s criteria for scalable, energy-efficient infrastructure aligned with hyperscale demand.
Strategic Focus on Hyperscale Growth
According to Loh Hwee Long, CEO of Keppel DC REIT Management, the divestment enables a strategic shift toward modern hyperscale-ready assets. These data centres are purpose-built to support cloud providers, AI systems, and digital content platforms.
Target reinvestment markets include:
- Singapore
- Tokyo
- Amsterdam
- Sydney
- Major Tier-1 U.S. cities
These hubs offer high connectivity, low latency, and scalability critical for digital infrastructure.
Financial and Operational Impact
Proceeds from the sale will be used for debt repayment and transaction costs. The REIT’s aggregate leverage is expected to decrease by 0.3 percentage points to 31.2 percent.
Key metrics remain healthy:
- Occupancy Rate: 96.6 percent
- WALE (Weighted Average Lease Expiry): Increased from 6.3 to 7.4 years
This reflects ongoing portfolio strength and long-term income stability.
Reinforcing a Future-Ready Portfolio
This divestment is part of Keppel DC REIT’s larger strategy to optimise its portfolio by focusing on assets in high-growth, tech-driven markets. By exiting non-core holdings, the REIT enhances operational efficiency, improves capital deployment, and positions itself for future expansion in the global digital economy.
