PhillipCapital analyst Natalie Ong has upgraded her recommendation on Keppel DC REIT to “accumulate” from “neutral” with a higher target price of $3.20 from $2.91 previously.

“Our dividend discount model (DDM)-based target price has been raised to reflect higher occupancy and asset productivity following asset enhancement initiatives (AEI), which raises our net property income (NPI) by 6.9% on a same store basis (excluding any acquisition assumption),” Ong writes in a Feb 1 report.

“Our previous target price of $2.91 assumes that Keppel DC REIT will make $500 million of acquisitions in 1QFY2021e (NPI yield 6% and loan-to-value or LTV 30%). In this report, we push back our $500 million acquisition assumption (NPI yield 6% and LTV 30%) from 1QFY2021 to 4QFY2021.”

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