Keppel Ltd. and Keppel DC REIT Management Pte. Ltd. announced on December 26, 2025, that the relevant authorities have granted conditional approval for a 10-year land tenure lease extension, expiring on July 15, 2050, for the Keppel Data Center Campus at Genting Lane in Singapore. The extension forms part of the divestment of two artificial intelligence-ready hyperscale data centers to Keppel DC REIT.

Transaction Details and Financial Impact

As part of the transaction announced in November 2024, Keppel DC REIT will pay a final sum of SGD 350 million out of the total sale consideration of SGD 1.38 billion to the sellers for securing the 10-year land tenure lease extension. The sellers are a joint venture between Keppel's Connectivity Division and Cuscaden Peak Investments Private Limited. Keppel's share of the SGD 350 million will be approximately SGD 70.9 million, based on Keppel's effective stake in the joint venture, which includes both its interests in the Keppel JV and indirect interests via Alpha Data Centre Fund.

The transaction involves the divestment of Keppel DC Singapore 7 (KDC SGP 7) and Keppel DC Singapore 8 (KDC SGP 8) in the Keppel Data Centre Campus to Keppel DC REIT.

Asset Enhancement and Portfolio Growth

The 10-year lease extension provides additional runway and flexibility for Keppel DC REIT to execute asset enhancement initiatives (AEI), including the fit-out of unutilised space into data halls at KDC SGP 8. These initiatives are expected to drive further revenue and valuation uplifts due to the extended land tenure, thereby amplifying returns on investment. The extended land tenure also helps with client retention, contributing to a resilient portfolio and a consistent stream of high-quality cash flows.

Following the land tenure lease extension for KDC SGP 7 and 8, as well as the acquisition of the remaining interests in Keppel DC Singapore 3 and 4 announced on December 16, 2025, Keppel DC REIT's portfolio assets under management (AUM) will increase by approximately 8.5% from SGD 5.7 billion to SGD 6.2 billion.

Future Development Plans

Keppel will leverage the extended land lease to advance Keppel DC Singapore 9 (KDC SGP 9), the third data centre in the campus. KDC SGP 9 will be developed by Keppel and its two data center private funds, namely Keppel Data Centre Funds II and III. This development strengthens Keppel's pipeline of AI-ready data centers to meet evolving customer needs.

The land tenure lease extension is dependent on the fulfilment of certain conditions. For clarity, Keppel DC REIT does not hold any economic interest in Keppel DC Singapore 9 and is not responsible for the construction costs of KDC SGP 9.

Executive Commentary

Manjot Singh Mann, CEO of Connectivity at Keppel, stated that the company is pleased to secure the lease extension for the Keppel Data Centre Campus. He explained that the divestment of KDC SGP 7 and KDC SGP 8 reflects how Keppel creates value through its integrated digital infrastructure ecosystem, enabling the company to mobilise investment capital to develop leading-edge, AI-ready hyperscale data centers while crystallising value for Keppel and its Limited Partners.

Loh Hwee Long, CEO of Keppel DC REIT, commented that the additional decade of land tenure for the two AI-ready hyperscale assets positions Keppel DC REIT to capture growing demand in Singapore's highly supply-constrained data center market. He noted that the extension, coupled with targeted asset enhancement initiatives, will reinforce portfolio resilience and unlock growth opportunities, strengthening the ability to deliver sustainable returns.

The increase in AUM is attributable to investments in debt securities, the acquisition of Tokyo Data Center 3, completed on November 19, 2025, and the valuation uplift for the 100% interests in KDC SGP 7 and KDC SGP 8, taking into account the land tenure lease extension.

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