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DBS starts Digital Core REIT at 'buy' with TP of US$1.40

Felicia Tan
Felicia Tan1/14/2022 11:45 AM GMT+08  • 2 min read
DBS starts Digital Core REIT at 'buy' with TP of US$1.40
Key risks to the REIT would be a “slower-than-anticipated acquisition growth and a spike in borrowing costs”.
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DBS Group Research has initiated “buy” on Digital Core REIT with a target price of US$1.40 ($1.88).

The target price is based on a discounted cash flow (DCF) model with a weighted average cost of capital (WACC) of 5.3% (and a risk-free rate of 2.0%).

“This implies a normalised target yield of 3.6% in the next two years. We have assumed a total of US$750 million in acquisitions over the next two years,” write analysts Dale Lai and Derek Tan in a Jan 14 report.

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