Keppel's two data center land leases approved for extension by 10 years until 2050 | Lianhe Zaobao

Keppel Corporation (Keppel) led joint venture has received conditional approval to extend the land lease for two data centers by 10 years until July 15, 2050. Keppel and Keppel Data Centre REIT jointly announced the news on Friday (December 26). Keppel had previously announced the sale of the two data centers located at Genting Lane to Keppel Data Centre REIT, and ensuring the extension of the land lease is part of the transaction. According to the transaction arrangement announced in November 2024, after obtaining the 10-year lease extension, Keppel Data Centre REIT will acquire the two data centers from a joint venture formed by Cuscaden Peak Investments and Keppel's communications business unit. As part of the transaction, the REIT will pay a final payment of SGD 350 million, with a total transaction amount of SGD 1.38 billion. Based on Keppel's effective ownership percentage in the joint venture, Keppel is expected to receive approximately SGD 70.9 million from this final payment. Further Reading Keppel sells stake in two local data centers to its trust for SGD 50.5 million Keppel Data Centre REIT's distributable income increases by 55.5% in the first nine months The two data centers are Keppel DC Singapore 7 and Keppel DC Singapore 8, both of which support artificial intelligence (AI) The application of ultra-large-scale data centers. The announcement stated that after the lease extension, Keppel DC Reit will have greater development space and flexibility in its Asset Enhancement Initiatives (AEI), including converting idle space in Data Center 8 into data rooms. This will help drive revenue growth, enhance asset valuation, and strengthen the ability to retain customers, resulting in sustained and high-quality cash flow. Loh Wai Keong, President of Keppel DC Reit Management, said that extending the land use rights by 10 years will enable the trust to better seize the opportunities arising from the ongoing tight supply and demand for data centers in the country, in response to the growing market demand. Keppel's stock price fell 0.97% to SGD 10.25 on Friday, while Keppel DC Reit shares remained flat at SGD 2.21