Singapore’s Keppel DC REIT deepens Japan exposure with USD 1.1bn data centre deal

Singapore-listed Keppel DC REIT has agreed to acquire an 88.6% effective interest in Tokyo Data Centre 4 and Tokyo Data Centre 5 for JPY 168.4bn (USD 1.1bn), increasing its exposure to Japan and adding two hyperscale data-centre assets to its portfolio.

The two five-storey data centres are located in Inzai City, one of Japan’s most established data-centre clusters. Completed in 2021 and 2024, they are fully fitted and fully occupied by four investment-grade internet and IT services clients. The leases include contracted annual rent escalations of approximately 2.8%, providing built-in rental growth. The acquisition is expected to close in the fourth quarter of 2026.

The deal comes just over a year after Keppel DC REIT announced the acquisition of Tokyo Data Centre 3 in September 2025. Once the latest transaction is completed, Japan is expected to account for roughly 23% of portfolio rental income, up from about 9%, while Singapore is expected to remain the REIT’s largest market.

The appeal of the assets extends beyond their location and tenant base. Japan’s data-centre market continues to benefit from demand linked to cloud computing, artificial intelligence and broader digitalisation trends, while market participants have reported constraints related to power availability and new supply.

Those pressures are particularly relevant in Inzai, which has developed into a major hyperscale data-centre hub. As a result, operational facilities with secured power capacity, established infrastructure and existing tenants may command increasing strategic value.

Acquiring operational facilities also enables Keppel DC REIT to avoid many of the development and lease-up risks associated with new construction. Because the assets are already operational and fully occupied, they are expected to contribute rental income immediately after completion.

The acquisition also aligns with broader investment interest in digital infrastructure across Asia. As AI and cloud investment accelerate, investors have increasingly focused on operational facilities in established locations with reliable power access and contracted customers. In markets such as Greater Tokyo, where supply constraints have been reported, existing data centres have become especially attractive infrastructure assets.

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