With interest rates poised to decline, many REITs have been more active in acquisitions and capital recycling. One of these REITs is Keppel DC REIT (SGX: AJBU). The data centre REIT announced a major acquisition of two data centres in a S$1.4 billion transaction involving its sponsor, Keppel Ltd (SGX: BN4). Income investors will be pleased to know that the purchase will increase Keppel DC REIT’s distribution per unit (DPU). Here are five aspects of this deal that investors should know about.

Details of the acquisition

Keppel DC REIT will acquire a 99.49% interest in two colocation data centres in Singapore – KDC SGP 7 and KDC SGP 8. The purchase consideration for this stake is around S$1.03 billion and is below two independent valuations done by Knight Frank and Savills. In addition, the REIT will fork out an additional S$350 million to Keppel’s joint venture shareholders should a 10-year land tenure lease extension to 2050 be approved by the authorities....