Strong Interest in Keppel DC REIT IPO
• Public Offer of 53,763,000 Units approximately 9.6 times subscribed, valid applications amount to approximately S$478.7 million
• Largest REIT IPO in Singapore year-to-date with S$512.9 million raised
• Commencement of trading of Keppel DC REIT on the Main Board of the SGX-ST at 2.00 pm today, 12 December 2014
Keppel DC REIT Management Pte. Ltd., a wholly-owned subsidiary of Keppel Telecommunications & Transportation Ltd has received overwhelming demand from institutional and retail investors for its initial public offering of 261,138,000 Units.
The Offering comprised an international placement of 207,375,000 Units1 to investors, including institutional and other investors in Singapore (the "Placement Tranche"), and an offering of 53,763,000 Units to the public in Singapore (the "Public Offer").
Due to strong demand from institutional investors during the book-building process, the Units were priced at the top end of the offering price range at S$0.93 per Unit. Indications of interest received from institutional investors for the Placement Tranche amounted to S$4.7 billion, representing approximately 24.4 times of the Units available1 under the Placement Tranche.
At the close of the Public Offer at 12.00 pm on 10 December 2014, 15,627 valid applications for an aggregate of 514,724,000 Units amounting to approximately S$478.7 million were received, resulting in the Public Offer being 9.6 times subscribed.
Concurrently but separate from the Offering, Keppel DC REIT secured S$270.0 million from nine cornerstone investors comprising AEW Asia Pte Ltd, DBS Bank Ltd., DBS Bank Ltd. (on behalf of certain private banking clients), Eastspring Investments (Singapore) Limited, Fortress Capital Asset Management (M) Sdn. Bhd., Mr Gordon Tang, Mr Lim Chap Huat, Myriad Asset Management Limited (on behalf of Myriad Opportunities Master Fund Limited), and Wellington Management Company, LLP (on behalf of various investment advisory clients). Collectively, these cornerstone investors have subscribed for an aggregate of 290,316,000 Units at the Offering Price (the "Cornerstone Units"), representing 53% of the total gross IPO proceeds.
In total, Keppel DC REIT has raised S$512.9 million from the Offering and the Cornerstone Units, making it the largest REIT IPO on the SGX-ST for the year-to-date.
Commenting on the robust demand, Mr Chua Hsien Yang, Chief Executive Officer of the Manager said, "The overwhelming demand from both institutional and retail investors for the Offering is a strong testament to Keppel DC REIT's high quality portfolio and strong management team".
"We are very encouraged that investors have signalled their confidence in this truly unique opportunity to invest in the first data centre REIT listed in Asia and in Singapore. Backed by a sound growth strategy, active portfolio management, a visible acquisition pipeline provided by its committed Sponsor and asset enhancement initiatives, Keppel DC REIT will strive to provide regular and stable distributions to all its investors," he added.
Based on the Offering Price of S$0.93 per Unit, Keppel DC REIT investors can expect a distribution yield of 6.8%2 in Forecast Year 2015 and 7.1%2 in Projection Year 2016 with a distribution growth of 4.5%2, driven by built-in rental escalations as well as the renewal or commencement of leases and co-location arrangements.
Trading of Keppel DC REIT Units on the Main Board of Singapore Exchange Securities Trading Limited (the "SGX-ST") is expected to commence at 2.00pm today, 12 December 2014. Details on allotments and/or allocations will be published in The Business Times and SGXNET prior to the listing of the Units on the Main Board of the SGX-ST. The announcement will also be posted on the website of the SGX-ST at http://www.sgx.com.
The Joint Financial Advisers and Issue Managers for the Offering are DBS Bank Ltd. and Standard Chartered Securities (Singapore) Pte. Limited while the Joint Global Coordinators for the Offering are DBS Bank Ltd., Standard Chartered Securities (Singapore) Pte. Limited and Credit Suisse (Singapore) Limited. The Joint Bookrunners and Underwriters are DBS Bank Ltd., Standard Chartered Securities (Singapore) Pte. Limited, Credit Suisse (Singapore) Limited, Deutsche Bank AG, Singapore Branch and Goldman Sachs (Singapore) Pte..