Keppel DC REIT (KDCREIT)

REITs have had a good run, yield compression may have come to an end

(Nov 18): Yields on 10-year Singapore Government Securities have been rising, albeit gently from a low base (see Chart 1). Similarly, yields on 10-year US Treasuries are also rising, from a low of 1.4% in September to 1.945% as at Nov 11 (see Chart 2). On Oct 30, the US Federal Reserve, through a statement by the Federal Open Market Committee, announced a 25-basis-point cut in the Fed funds rate to 1.5% to 1.75%.

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Analysts bullish on more acquisitions to boost Keppel DC REIT after 3Q results in line with expectations

SINGAPORE (Oct 17): Analysts believe that Keppel DC REIT could turn to more new acquisition to seek growth, after the data centre trust posted 3Q19 results that were in line with expectations.

For the latest quarter ended September 2019, KDCREIT reported a 4.3% rise in distribution per unit (DPU) to 1.93 cents, on the back of a 5.4% growth in distributable income to $27.4 million.

The higher DPU came despite a 1.8% dip in net property income to $42.3 million, as 3Q19 gross revenue slipped 2.5% to $46.4 million.

Data is the new black gold

SINGAPORE (Sept 23): In a few fiery moments, the drone strikes on Saudi Aramco’s main facility at Abqaiq cut 5% off the global oil supply. Oil prices surged as much as 20% when the markets reopened as analysts scrambled to make sense of the impact. The IPO of state-owned oil company Saudi Aramco, already delayed multiple times, seemed likely to be pushed back again, amid major damage to its operations, which accounted for half of the kingdom’s oil production.

Yield-accretive data centres and offices spur DPU, NAV and AUM growth

SINGAPORE (Sept 23): Since the start of September, four real estate investment trusts and one business trust have announced equity raisings. So far this year, S-REITs have raised more than $3 billion in equity fundraisings, excluding REIT IPOs (see Table 1).

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Keppel DC REIT acquiring two data centres for $585 mil; launches equity fund raising

SINGAPORE (Sept 16): Keppel DC REIT is acquiring a 99% stake in Keppel DC Singapore 4 and 1-Net North Data Centre for a total consideration of $585.1 million.

The proposed acquisitions are expected to be “highly accretive” to the REIT’s Distribution per Unit (DPU), says the manager of Keppel DC REIT.

The manager also plans to fund the acquisitions with proceeds with a fully underwritten equity fund raising exercise of $473.8 million, as well as debt.

Can Keppel DC REIT deliver the acquisitions needed to keep premium valuations?

SINGAPORE (July 22): Keppel DC REIT, the first pure-play data centre REIT listed in Asia, has seen its shares climb some 28% so far this year on the back of the global boom in data centres.

The REIT is now trading near an all-time high, nearly double of its IPO price of 93 cents per unit in December 2014.

In the latest quarter, Keppel DC REIT posted a 6% increase in distribution per unit (DPU) to 1.93 cents, from 1.82 cents in 2Q18.

Keppel DC REIT 2Q DPU rises 6% to 1.93 cents on acquisitions

SINGAPORE (July 16): The manager of Keppel DC REIT has declared a DPU of 1.93 cents for 2Q19.

This is 6% higher than the DPU of 1.82 cents declared in 2Q18 and also brings 1H19 DPU to 3.85 cents, 6.4% higher than 1H18’s 3.62 cents.

Gross revenue for 2Q19 rose 13.2% to $47.5 million but property expenses rose a gentler 9% to $4.2 million, resulting in Net Property Income to rise 13.6% to $43.3 million.

Analysts remain positive as acquisitions, asset enhancements drive Keppel DC REIT

SINGAPORE (Apr 17): Analysts are keeping their bullish stance on Keppel DC REIT (KDCREIT), after the group on Monday announced 1Q19 results that were in line with expectations.

KDCREIT reported distribution per unit (DPU) of 1.92 cents for the 1Q19 ended March, some 6.7% higher than DPU of 1.80 cents a year ago.

This formed 24.5% and 24% of full-year forecasts for OCBC Investment Research and CGS-CIMB Research, respectively.

Go on the defensive with these S-REITs next year, says OCBC

SINGAPORE (Dec 4): OCBC Investment Research expects Singapore REITs (S-REITs) to record positive DPU growth next year.

For those under its coverage, OCBC is projecting growth of 0.3% for FY19F and 2.4% for FY20F.

In terms of sub-sector preference, OCBC prefers retail REITs, followed by industrial REITs, hospitality REITs and office REITs.

“Heading into 2019, we maintain ‘neutral’ on S-REITs, but with a bias to the upside,” says OCBC lead analyst Andy Wong Teck Ching in a Monday report.

Keppel DC REIT kept at ‘buy’ on positive outlook, AUM growth, healthy operating stats

SINGAPORE (Oct 17): Analysts are maintaining Keppel DC REIT (KDCREIT) at “buy” on healthy demand for data centres, AUM growth via acquisition and 3Q18 healthy operating metrics.

KDCREIT last night reported its 3Q18 gross revenue and NPI jumped 34.0% and 33.4% y-o-y to $47.6 million and $43 million, respectively driven largely by acquisitions and higher variable income from its Singapore properties.

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