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Keppel DC Reit
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Keppel DC Reit
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Lobster
Elite |
25-Oct-2021 20:17
Yells: "Even Adam Khoo believes in the Black Market!" |
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So has electricity got to do with this results?
Keppel DC Reit Q3 DPU up 4.5 per cent to S$0.02462 |
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Retired
Member |
20-Oct-2021 11:33
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For a while, the share price was dropping. Those who were in the know probably feel negatively towards this arrangement as I do. Is this REIT being used to benefit SPH and Keppel at the expense of unitholders?. Why fix something that is not broken? | ||||||||||||||||||||||||||||||||||||
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MARKWONG
Senior |
18-Oct-2021 17:51
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Looks like the market does not respond positively to this asset deal even with 9% annual interest. wonder who will be the fanancier of the remaining $493 mio. |
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Joelton
Supreme |
15-Oct-2021 09:57
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M1, Keppel DC Reit finalise agreements on network asset deal
M1 is set to unlock value from S$580 million worth of its network assets, while Keppel DC Reit will invest a total of S$89.7 million into bonds and preference shares of the telco' s newly incorporated unit, M1 Network (NetCo).
In a joint statement on Thursday (Oct 14) night, Keppel DC Reit and the telco announced they have inked agreements for a proposed investment by the real estate investment trust (Reit) into NetCo.
NetCo will acquire the telco' s mobile, fixed and fibre assets for about S$580 million, or the assets' net book value, through an asset transfer agreement.
And under a 15-year network services agreement, M1 and its mobile virtual network operators will use NetCo' s network capacity, while the telco handles the day-to-day operation and maintenance of the network assets as well as the capex works.
The proposed transactions are subject to regulatory approvals and approval by Keppel DC Reit unitholders, and are expected to be completed by the end of this year.
The finalised agreements came after the parties signed a non-binding term sheet, announced in April, to establish the special purpose vehicle to house the assets.
M1 is jointly owned by Keppel Corp and Singapore Press Holdings, which publishes The Business Times.
Manjot Singh Mann, chief executive officer (CEO) of the telco, said that the proposed realisation of value from M1' s network assets is part of the Keppel group' s asset monetisation strategy and asset-light business model under its Vision 2030.
" When completed, this will unlock value from M1' s existing network assets, enhance M1' s ability to fund its growth initiatives and accelerate its aspirations as Singapore' s first digital network operator," he added.
Anthea Lea, CEO of Keppel DC Reit' s manager, noted that the proposed investment is aligned with its strategy to provide its unitholders with regular and stable distributions.
The deal will also strengthen the Reit' s income resilience, allow it to benefit from further diversification in income streams and create a stronger platform for acquisition growth via better access to capital and debt markets, Lea said.
NetCo will fund the acquisition with up to S$493 million in external financing and by issuing S$88.7 million of unsubordinated bonds, bearing interest at 9.17 per cent per annum, and S$1 million in preference shares.
Keppel DC Reit or its wholly-owned subsidiaries will subscribe to the bonds, while the Reit' s subsidiary KDCR Singapore 2 will subscribe to the preference shares. In return, Keppel DC Reit will receive S$11 million, comprising both principal and interest, each year for 15 years.
The proposed investment in the NetCo bonds and preference shares is expected to be accretive to Keppel DC Reit' s distribution per unit (DPU), providing a long-term stable cash flow for 15 years, according to the joint statement.
M1 and the Reit will have equal representation on the board of NetCo.
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Jamesbond007
Veteran |
12-Oct-2021 15:08
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one reason could be the rally in oil prices. Data centres are fuel-heavy consumers. |
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milopeng
Senior |
12-Oct-2021 13:26
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hmmm bought 2.33 today....this few week data centres quite weak mainly KDC MLT MINT...i think funds are rebalancing their portfolio in preparation to jeep the upcoming digital realty reit so as not to be overexposed data centre? Not very sure of the very hasty forceful selling reason behide, but i know this kind of opportunity do not come easily for strong fundamental counters like this. | ||||||||||||||||||||||||||||||||||||
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Joelton
Supreme |
08-Oct-2021 10:15
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Why REITs with data centres are under short-term price pressure
REITs with data centres appear to have been under some selling pressure in the past two to three weeks. In general, analysts note that bond yields have spiked, and that has caused REIT yields to expand as unit prices fell.
Some analysts have also suggested that the impending IPO of Digital Realty REIT could be impacting the local REITs with data centres as the Digital Realty REIT heading for the Singapore Exchange (SGX) is likely to be listed at cheaper valuations.
Of course, analysts point out that Keppel DC REIT (KDC REIT) could be moving to an ex-growth phase with organic growth reaching a plateau. At any rate, its yield was too compressed.
Other REIT managers note that electricity prices have spiked. Most data centres, in particular those in Europe and the US, are leased on a core and shell basis where the tenants pay for the costs of the data centres.
Since the start of the year, KDC REIT has fallen more than 15%, of which 5.5% was lost in September alone. The declines caused unit prices to break below a support and its one-year low of $2.45 on Oct 4. The break below this level provides a downside objective of $2.26 initially. KDC REIT is trading at $2.37, suggesting that unit prices have yet to reach their potential downside. The 2020 pandemic low for KDC REIT was $1.76. At present, it appears unlikely that unit prices could go that far down.
The cause of the KDC REIT&rsquo s weakness could be idiosyncratic, pertaining to its JV with M1 and also its acquisition in China which investors have been lukewarm about.
In April this year, M1 and KDC REIT&rsquo s manager signed a non-binding term sheet for a JV. Under the deal, M1 sells its network assets into a special purpose vehicle (SPV) for $580 million. This JV will be funded by a combination of equity, debt and preference shares. M1 will hold 100% of the ordinary shares and KDC REIT will fund the joint venture through debt and preference shares. As a result, M1 has total control.
Based on KDC REIT&rsquo s 1HFY2021 results ended June, 71.5% of the portfolio by rental income is from colocation data centres, 19.2% from fully-fitted and 9.3% from shell and core. The fully-fitted and shell and core data centres are on double-net and triple-net leases, where the tenant bears most of the expenses. According to KDC REIT&rsquo s presentation, its clients treat the Keppel Corp leases on a pass-through basis based on the colocation agreements and lease agreements. That is, these tenants also bear the expenses of the property.
In terms of emissions, in 2020, KDC REIT&rsquo s Scope 1 greenhouse gas (GHG) emissions totalled approximately 1,927 tCO2e while Scope 2 GHG emissions totalled 213,571 tCO2e. Together, the GHG emissions for Scopes 1 and 2 were 215,498 tCO2e in 2020, an increase from 2019&rsquo s 133,464 tCO2e, due primarily to the addition of KDC SGP 4 to the REIT&rsquo s portfolio. The majority of KDC REIT&rsquo s electricity is supplied from the grid and fuel consumption is mostly diesel from backup generators, according to its annual report.
GHG emissions consist primarily of Scope 1 direct emissions from fuel consumption and Scope 2 from indirect emissions from purchased electricity. Gases included in the calculation are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), with totals expressed in units of tonnes of carbon dioxide equivalent (tCO2e).
The latest plans by sponsor Keppel may go some way to mitigate Keppel DC REIT&rsquo s reliance on fossil fuels. On Oct 6, Keppel announced that it plans to halve the company&rsquo s Scope 1 and 2 carbon emissions by 2030, compared to 2020 levels, and achieve net zero by 2050. The target is in line with the Paris Agreement&rsquo s goal to limit global temperature increase to 1.5° C compared to pre-industrial levels, the company said.
The Oct 6 announcement by Keppel says Keppel Data Centres will tap renewable energy where possible and work with its customers to reduce the emissions of their data centre operations.
Separately, Mapletree Industrial Trust (MINT) and Ascendas REIT have also come under some selling pressure. Out of MINT&rsquo s portfolio of $6.7 billion, data centres make up 39.8% or $2.07 billion. Ascendas REIT&rsquo s data centres account for 10% of its $15.9 billion portfolio, or $1.59 billion. KDC REIT&rsquo s properties are valued at $3.08 billion. However, MINT and Ascendas REIT have more diversified industrial property portfolios.
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MARKWONG
Senior |
05-Oct-2021 17:51
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Shorted volume doubled these two days, DYODD
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Lobster
Elite |
05-Oct-2021 11:18
Yells: "Even Adam Khoo believes in the Black Market!" |
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It has everything to do with the poster. He was referring, I think, in reference to the person who implies electricity was the only contributor. Anyway, I leave it to him to clarify
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actan99
Master |
05-Oct-2021 10:47
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thanks , your refering to the P/B ratio value isit ?
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Andrewtan18
Senior |
05-Oct-2021 10:41
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There is a restructuring under wrap. In any restructuring there is a need to value the components in order for swapping. Keppel DC is a problem because it trades at > 2 times book. Having such a high premium on the future is normal for a growth stock with potential but it is a burden when it comes to swapping. The people behind the plan need to bring price down and there is still a long way to go. I foresee at least below 1.5x book which should see price go below $2.00.
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HKLim6
Member |
05-Oct-2021 09:33
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That' s not what the poster said. Anyway, higher electricity prices will have a negative impact going forward. https://www.channelnewsasia.com/business/gas-price-rise-europe-us-singapore-economy-2209591 Ms Eileen Yan, Deloitte Singapore&rsquo s infrastructure and capital projects advisory partner, said: &ldquo If global energy &ndash oil and gas &ndash prices continue to increase, especially if natural gas prices spike further in the winter season due to increased heating needs, the electricity prices in Singapore would follow the trend as fuel costs are passed through to electricity prices.&rdquo This, if it happens, will be felt more acutely by industries such as refinery, petrochemical, and transport and transportation, which use oil or natural gas as feedstocks or fuel. Businesses that are big electricity users, like data centres and shopping malls, may also expect more costly utility bills, said Ms Yan.
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Lobster
Elite |
04-Oct-2021 18:25
Yells: "Even Adam Khoo believes in the Black Market!" |
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You missed the point. So electricity contributes to its 20% drop in price since its high of $3.04 on February 21.?
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HKLim6
Member |
04-Oct-2021 17:50
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It has everything to do with electricity. As you know, 70% of DC Reit' s income comes from data centres with co-location lease. This means DC Reit is responsible for all expenses and responsible for facilities management. This includes electricity cost, which has been going up due to the cost of natgas.
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Lobster
Elite |
04-Oct-2021 17:40
Yells: "Even Adam Khoo believes in the Black Market!" |
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 some people like to any how hantam for the sake of hantam
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y2jchris
Veteran |
04-Oct-2021 15:01
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what logic is this. A data center is a facility that centralizes an organization' s shared IT operations and equipment for the purposes of storing, processing, and disseminating data and applications. Because they house an organization' s most critical and proprietary assets, data centers are vital to the continuity of daily operations. what to do with electricity?
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actan99
Master |
04-Oct-2021 11:19
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lol , what about EV cars then ? In the very near future, all the world' s cars use electricity as well .. so dont buy EV cars or dont buy their shares ? Hmmm...
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Stocky901
Supreme |
04-Oct-2021 11:07
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Data centres consume too much power. Price may go down below $2.20. 🤥
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actan99
Master |
04-Oct-2021 11:01
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Still dipping .... ?? whats wrong ? |
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Jamesbond007
Veteran |
01-Oct-2021 19:17
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Dpu trailing 12 month? | ||||||||||||||||||||||||||||||||||||
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