SINGAPORE (Feb 28): Efficient access to Asia’s Capital has established Singapore as an international hub for the listing and trading of international REITs. With the foundation of a favourable tax regime and well-established legal system, Singapore was the largest global REIT IPO platform in 2019. 

While dividends have a history of attracting investors to the REIT market, the ability for a REIT to raise secondary funds to facilitate portfolio growth is also important. Portfolio growth can also benefit unitholders through asset price appreciation, with the converse also applying to prices when portfolios contract. Last year also saw a record year for REIT secondary fundraising activity in Singapore, mostly to facilitate property acquisitions. 

REITs for dividends and growth? 

For investors, Keppel DC REIT has generated more return in unit price appreciation than combined dividend distributions since its IPO. The initial offer price for the Keppel DC REIT units was 0.93 cent per unit. The REIT closed on Feb 21 at a unit price of $2.52. 

Keppel DC REIT’s initial portfolio comprised eight assets across six countries with a value of $1.0 billion. From the time of its IPO, on Dec 12, 2014, to the end of 2019, the portfolio grew to 17 assets across eight countries with a portfolio value of $2.6 billion.

Keppel DC REIT expanded its presence in Singapore in 2019 with the strategic additions of Keppel DC Singapore 4 and DC1. This increased the REIT’s portfolio value by 30% from the $2-billion mark at the end of 2018. The CAGR of the portfolio value through to the end of 2019 was 21%. Similarly, the annualised total return of the REIT in terms of price return was 22% from IPO through to Feb 21, 2020. 

On Dec 12, 2019, Keppel DC REIT entered into a sale and purchase agreement to acquire 100% freehold interest in a shell and core purpose-built data centre facility in Kelsterbach, Germany. The acquisition is expected to be completed this year. 

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