Understanding the Keppel DC REIT Preferential Offering

A preferential offering grants existing shareholders the right to purchase new shares (or, in this case, units) at a discounted price before they are offered to the general public. This allows unitholders to maintain their proportional ownership in the REIT and potentially benefit from future growth. The current offering price of S$2.588 represents a discount to KDCREIT’s last traded price. The primary purpose of this capital raise is to finance the recent acquisition of a 49% interest in a data centre in London, alongside potential future investments.

Key Details of the Offering

• Offering Size: 156,410,000 new units
• Offer Price: S$2.588 per unit
• Gross Proceeds: Approximately S$404.5 million
• Ex-Rights Date: December 6, 2023
• Rights Trading Period: December 7, 2023 – December 13, 2023
• Closing Date: December 15, 2023

The ex-rights date is crucial. After this date, you must have held units in KDCREIT to be eligible for the preferential offering. Rights are essentially entitlements to purchase new units at the offer price. These rights can be traded on the Singapore Exchange (SGX) if you do not wish to exercise them yourself. Selling your rights allows you to realize some value from the offering even if you don’t want to invest further.

Did You Know?:

What are the Funds Being Used For?

The net proceeds from the preferential offering will be primarily used to fund the recent acquisition of a 49% stake in a London-based data centre, a strategic move to expand KDCREIT’s geographical footprint and enhance its portfolio diversification. The remaining funds will be allocated towards potential future acquisitions and general corporate purposes. This expansion aligns with the growing demand for data centre infrastructure globally, driven by cloud computing, artificial intelligence, and the increasing digitalization of economies.

Considering the current market conditions and KDCREIT’s growth strategy, do you believe this acquisition is a sound investment for the REIT’s long-term future? Furthermore, how might rising interest rates impact the viability of future data centre projects?

Frequently Asked Questions About the Keppel DC REIT Offering

Here are some common questions unitholders are asking about the preferential offering:

What happens if I don’t want to participate in the Keppel DC REIT preferential offering?

You can sell your rights on the SGX during the rights trading period. Alternatively, you can let your rights lapse, but this means you will not receive any value for them.

How do I exercise my rights in the Keppel DC REIT offering?

You can exercise your rights through your Central Depository (CDP) account or through your brokerage firm. Instructions will be provided by both CDP and your broker.

What is the ex-rights date and why is it important?

The ex-rights date (December 6, 2023) is the date after which you must have held KDCREIT units to be eligible for the preferential offering. If you purchase units on or after the ex-rights date, you will not receive the rights.

What are the risks associated with participating in the preferential offering?

The value of your investment can fluctuate, and there is no guarantee of future returns. Dilution of existing holdings is also a potential risk, although the REIT believes the benefits of the acquisitions outweigh this concern.

Where can I find more information about the Keppel DC REIT preferential offering?

Detailed information is available on the Keppel DC REIT website (https://www.keppeldcreit.com/), the SGX website, and in the offering documents provided to unitholders.