The GIC-Equinix joint venture agreed to sell Tokyo data center assets to Keppel DC REIT for $1.2 billion.

Keppel DC REIT and its sponsor have agreed to acquire a 90 percent interest in two hyperscale data centres in Greater Tokyo from a joint venture between GIC and Equinix. The transaction values the properties and their operating company at JPY 190 billion ($1.2 billion), with completion expected in the fourth quarter. Under the deal structure, the Singapore-listed trust will hold an effective 88.62 percent interest, while Temasek-backed Keppel Ltd will acquire 1.38 percent. US-based Equinix will retain a 10 percent stake and continue as the facility operator, while public filings confirm that Singapore’s sovereign wealth fund GIC is divesting its entire 80 percent position and Equinix is reducing its holding by half.

The acquisition will nearly triple Japan’s contribution to Keppel DC REIT’s rental income, lifting it to 23 percent from 9 percent, and increase the trust’s assets under management to S$7.6 billion ($6 billion) from S$6.3 billion. The portfolio will expand to 27 data centres across 10 countries, with Singapore maintaining its position as the primary revenue driver, accounting for 60 percent of rental income. “This acquisition demonstrates our disciplined approach to acquiring quality assets with multiple avenues for value creation,” said Loh Hwee Long, chief executive officer of Keppel DC REIT’s manager.

The newly acquired five-storey co-location facilities, now designated Tokyo Data Centre 4 and Tokyo Data Centre 5, correspond to Equinix’s TY12x and TY13x campuses in Inzai, a digital infrastructure hub within Chiba prefecture. Spanning a combined gross floor area of 403,128 square feet (37,452 square metres) and a net lettable area of 163,294 square feet, the sites achieved completion in 2021 and 2024, respectively. Both fully fitted centres are currently 100 percent occupied by four investment-grade internet and IT services clients, one of whom leases space across both properties. Contracted rents escalate by an average of 2.8 percent annually, while existing rental rates are estimated to sit at least 30 percent below prevailing market levels.

Lease maturity profiles show Tokyo Data Centre 4 carrying a weighted average lease expiry (WALE) of 4.5 years, compared to 10.6 years for Tokyo Data Centre 5, resulting in a blended WALE of 8.3 years. With more than 5 percent of the properties’ income scheduled for renewal by 2029, the trust anticipates capturing significant upside. According to an investor presentation, Tokyo market rents have risen to JPY 20,500–JPY 30,000 per kilowatt per month, up from JPY 17,000–JPY 20,500 during the 2021 to 2023 period.

GIC and Equinix originally established their Japan joint venture in 2020 with over $1 billion in committed capital, launching with an initial portfolio comprising two Tokyo projects and one Osaka facility. GIC secured an 80 percent stake, while Equinix contributed its then-under-development TY12x and OS2x assets, alongside rights to a second Tokyo project, in exchange for a 20 percent equity share and cash proceeds. Equinix opened TY12x in March 2021 as its first Asian xScale facility, with the campus engineered to support 54 megawatts at full buildout. The adjacent TY13x site launched its initial 8-megawatt phase in June 2023, with a second facility planned to deliver 36 megawatts upon completion.

Keppel declined to identify the sellers, referring to them only as a global institutional investor and an established data centre owner and operator. An Equinix filing dated June 2026 previously reflected a 20 percent stake in the venture, corroborating that GIC is exiting completely while Equinix transfers 10 percentage points and retains the remainder. A Keppel DC REIT spokesperson cited confidentiality agreements for the non-disclosure of vendor identities. Equinix did not respond to requests for comment, and GIC declined to comment.

The trust plans to fund the total acquisition outlay of S$1.39 billion through a combination of S$591.1 million raised via a private placement, S$788.6 million in yen-denominated debt, and S$11.7 million in units issued to the manager as an acquisition fee. The trust has initiated the placement to secure gross proceeds of at least S$600 million. The financing structure is projected to increase aggregate leverage to 38 percent from 34 percent, or 39 percent when including temporary debt for refundable consumption tax. Financially, the acquisition is expected to boost pro forma distribution per unit by 2.6 percent and raise net asset value per unit to S$1.75 from S$1.71. Additionally, onboarding three new clients will dilute the largest tenant’s share of rental income to 38.2 percent, down from 43.5 percent.

This transaction follows Keppel DC REIT and its sponsor’s $551 million acquisition of Inzai 4 from a joint venture involving Colt Data Centre Services, Fidelity Investments, and Mitsui last year. Completed in November and renamed Tokyo Data Centre 3, the 20-megawatt facility is understood to be leased to Microsoft under a 15-year agreement. Inzai’s expanding server-hosting cluster also includes Google’s first Japanese data centre, which opened in 2023 as part of a $730 million infrastructure commitment. Sydney-based AirTrunk announced its seven-building TOK1 campus in 2020, targeting a total capacity exceeding 300 megawatts with an initial phase of approximately 60 megawatts. Meanwhile, Singapore’s ST Telemedia Global Data Centres opened the first building of a two-site Inzai campus at Goodman Business Park last year, designed to deliver up to 70 megawatts. US operator Stack Infrastructure, backed by Oaktree Capital Management, completed the first 18-megawatt building of its planned 36-megawatt Inzai campus in October 2024, with the second facility currently under development.