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Keppel DC Reit
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Keppel DC Reit
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Joelton
Supreme |
23-Jul-2020 09:49
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Analysts raise target prices for Keppel DC Reit on acquisitions, AEIs
 
DBS Group Research and CGS-CIMB have raised their target prices for Keppel DC Reit, citing expected acquisitions and ongoing asset enhancement initiatives (AEI) at the real estate investment trust' s (Reit) data centres. 
 
In a research report on Wednesday, DBS analysts Dale Lai and Derek Tan raised the price target to S$2.80 from S$2.55. CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee in a Tuesday report raised their target price to S$2.88 from S$2.17
 
Both sets of analysts maintained their " hold" calls.
 
Units of Keppel DC Reit were trading flat at S$2.75 as at 11.35am on Wednesday.
 
In their report, Mr Lai and Mr Tan said they raised the price target to reflect current market conditions and factor in improved efficiency of properties.
 
They maintained their " hold" call as the Reit' s unit price is at an all-time high, after rallying more than 8 per cent over the past two weeks. The stock has only a 2 per cent potential upside, and is trading at a forward yield of 3.2 per cent, they said.
 
Meanwhile, Ms Eing and Ms Lock noted that while Covid-19 had fuelled further demand and underpinned the importance of data centres, this demand had been priced in.
 
They raised their FY21-22 distribution per unit (DPU) forecast for the Reit by 4-4.5 per cent, and rolled over their FY21 target price to S$2.88, after factoring in a S$300 million acquisition and reducing their cost of equity assumption.
 
The Reit on Tuesday posted a DPU of 4.375 Singapore cents for the half year ended June 30, up 13.6 per cent from 3.85 cents a year ago. 
 
Ms Eing and Ms Lock noted that the Reit' s " strong" results were mainly driven by the acquisition of its Keppel DC Singapore 4 and DC1 data centres in Q4 2019, and its Kelsterbach data centre in May 2020.
 
" On the acquisition front, we understand that Keppel DC Reit is close to finalising a deal, which could happen as soon as Q3," they added. " The Reit is evaluating a wide range of deals which include new and existing countries with cap rates in the range of 4-7 per cent."
 
As the sponsor&rsquo s assets will not be ready in 2020, acquisitions in 2020 will be from third parties, Ms Eing and Ms Lock said.
 
In their report, DBS' s Mr Lai and Mr Tan also noted that the Reit was " on track to deliver acquisitions in FY20" , even though prolonged travel restrictions due to the Covid-19 pandemic had hampered acquisition plans, especially as the Reit is targeting overseas acquisitions.
 
" Even though we are past the half-year mark for FY20, we believe Keppel DC Reit will speed up its acquisition momentum as it has been working on these deals throughout the lockdown period," they added.
 
Mr Lai and Mr Tan said the Reit' s low weighted average cost of capital was " a plus for any equity fundraising exercise, as almost any deal is likely to be accretive" .
 
" Despite this, we are confident that management will acquire responsibly and are not averse to lower yielding acquisitions, as long as there is long-term income stability and future growth potential," they added.
 
The DBS analysts also cited higher-than-expected growth and returns as a potential catalyst, noting that the Reit' s AEIs and development projects had been delayed due to the pandemic.
 
" As works gradually resume, catalysts to look out for include shorter-than-expected delays to project completions and acquisitions that are more accretive than projected," they said.
 
In their report, CGS-CIMB' s Ms Eing and Ms Lock also noted that Keppel DC Reit' s ongoing AEIs could " drive organic growth" .
 
The AEI at its Keppel DC Dublin 1 data centre had resumed and is expected to be completed in the second half of the year, subject to further delays caused by the pandemic. The Reit also commenced works to convert additional space at Keppel DC Dublin 2 into a data hall, with an expected completion in the first half of 2021, they added.
 
However, AEIs for the Reit' s Keppel DC Singapore 5 and DC1 data centres in Singapore remain suspended. They were originally scheduled to be completed in the second half of the year, the analysts said.
 
The additional power capacity at Keppel DC Singapore 5 has been fully committed by an existing client, while the Reit is in talks with potential clients to take up additional power capacity at Keppel DC Dublin 1 and Dublin 2.
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Joelton
Supreme |
22-Jul-2020 09:58
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Keppel DC Reit posts 13.6% rise in H1 DPU
 
KEPPEL Data Centre (DC) Reit on Tuesday posted a distribution per unit (DPU) of 4.375 Singapore cents for the half-year ended June 30, up 13.6 per cent from 3.85 cents a year ago.
 
Distributable income rose 38 per cent to S$75 million, largely driven by the acquisitions of Keppel DC Singapore 4 (KDC SGP 4) and DC1 Singapore data centres in Q4 2019. Keppel DC Reit had raised S$478.2 million in September last year through a private placement and preferential offering to partially fund the acquisitions.
 
Net property income was 32.1 per cent higher at S$114.2 million, while gross revenue increased 29.8 per cent to S$124 million.
 
Gross rental income grew 31.7 per cent to S$120 million due to the acquisitions of KDC SGP 4 and DC1, as well as Kelsterbach Data Centre in Germany, completed on May 1, 2020.
 
Portfolio occupancy was 96.1 per cent as at June 30, 2020, with a weighted average lease expiry (WALE) of 7.4 years.
Following the completion of the acquisitions of Kelsterbach DC and the remaining 999‐ year leasehold land interest at Keppel DC Dublin 1 in H1, the Reit&rsquo s assets under management as at June 30, 2020 was increased to S$2.8 billion.
 
The Reit has 2.6 per cent of total net lettable area (NLA) up for renewal in the second half of 2020. The manager has started engaging clients for early renewals and lowered the total NLA due for expiry in 2021 from 10.7 per cent as at end‐ 2019 to 6.2 per cent as at June 30, 2020.
 
Net asset value per unit stood at S$1.17 as at June 30, 2020, up from S$1.14 as at end-Dec.
 
The Reit&rsquo s average cost of debt was at 1.7 per cent per annum, and its interest coverage ratio was at 12.8 times as at June 30. Aggregate leverage was 34.5 per cent as at June 30, up from 30.7 per cent as at end-December.
 
Asset-enhancements works at Keppel DC Dublin 1 have resumed following the two-month lockdown by the Irish government, and are expected to be completed in H2. Additional space at Keppel DC Dublin 2 is currently being converted into a data hall, to be completed in H1 2021.
 
In Singapore, the additional power capacity at Keppel DC Singapore 5 has been fully committed by an existing client in the facility. Asset enhancement works at Keppel DC Singapore 5 and DC1 remain suspended.
 
The manager said prospects for the data centre market remain robust, underpinned by strong digital trends such as rapid cloud adoption, smart technologies, big-data analytics and 5G deployment.
 
It noted that the widespread lockdowns due to the pandemic have accelerated the adoption of technology. " The data-centre industry remains resilient, supporting data storage and processing requirements of the digital economy," said the manager.
 
Unitholders can expect distributions to be paid on Sept 1, 2020.
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actan99
Master |
29-May-2020 15:13
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Door closing soon.  Chiong up le.  |
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RexxarLoh
Member |
02-Mar-2019 19:46
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thxs. Just too bad that the price is kinda too high.
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tcshares
Senior |
23-Jan-2019 18:33
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yes | ||
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RexxarLoh
Member |
18-Jan-2019 15:18
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Is this trust worth to invest in? Any advises? | ||
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marubozu1688
Master |
09-Nov-2018 22:56
![]() Yells: "Be humble in front of Mr. Market." |
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Keppel DC REIT is included in Shariah Index. http://mystocksinvesting.com/singapore-reits/shariah-reit/shariah-compliant-singapore-reit-for-muslim-investors/ |
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marubozu1688
Master |
05-Feb-2017 18:54
![]() Yells: "Be humble in front of Mr. Market." |
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Keppel DC REIT is one of the over value Singapore REIT. http://mystocksinvesting.com/singapore-reits/singapore-reit-fundamental-analysis-comparison-table-5-february-2017/ |
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flyersummer
Senior |
24-Jan-2017 22:37
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http://internetfileserver.phillip.com.sg/POEMS/Stocks/Research/ResearchCoverage/SG/KDCREIT20170124.pdf Recommendation: Neutral (Downgraded), Last Close Price: S$1.215 Target Price: S$1.15 (previous: $1.26), Analyst: Richard Leow
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FATABA
Supreme |
24-Jan-2017 09:18
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Keppel DC REIT& rsquo s acquisition to power earnings going forward..... Overall full year still better ....and its due to the acquisition .....will power its earning moving into 2017. A good yield counter as data centre is on growth path. 
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pnuklis
Master |
24-Jan-2017 09:16
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Poor results and 0.0123 dividend. Looks to be shorted today? |
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angmohlin
Veteran |
11-Jan-2017 12:53
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Two bearish engulfing patterns side-by-side means very bearish, could re-test 1.16 level soon. Caveat.   |
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FATABA
Supreme |
11-Jan-2017 12:48
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More likely one of the broking hse...pushing it down to accumulate....normal Result on 23rd Jan .  Vested
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grandjedi
Member |
11-Jan-2017 12:31
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What' s the reason for 3% drop today?   |
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pnuklis
Master |
19-Dec-2016 16:54
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Why are shortists so active today? What is the bad news???????????????????????? |
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waters
Senior |
30-Nov-2016 10:39
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Keppel DC REIT&rsquo s acquisition to power earnings going forwardBy: 
Benjamin Cher
  SINGAPORE (Nov 29): DBS Vickers Securities is maintaining its &ldquo buy&rdquo call on Keppel DC REIT with a revised target price of $1.33, after rolling forward valuations and pricing in the recently-announced acquisition of Keppel DC Singapore 3 (KDC SG 3), a carrier-neutral data centre in Singapore formerly known as T27 or Keppel Datahub 2. To recap, Keppel Data Centres Holding (KDCH) &ndash a joint venture between Keppel Telecommunications & Transportation (Keppel T& T) and Keppel Land &ndash in October announced the divestment of 90% of KDC SGP 3 to Keppel DC REIT via share sale for an aggregate consideration of $141 million. In a Tuesday report, analysts Derek Tan and Mervyn Song say the acquisition of KDC SG 3 will further diversify the REIT&rsquo s earnings base as well as fuel a stronger earnings growth trajectory of 5% going forward.   According to the analysts, the $279.5 million in new equity raised to fund the deal has improved Keppel DC REIT&rsquo s liquidity and strengthened its balance sheet, positioning the REIT &ldquo for another year of strong growth driven from acquisitions&rdquo . Further upside to the deal will come from the management&rsquo s ability to garner tax transparency status, they add. In Tan and Song&rsquo s opinion, the REIT is &ldquo projected to deliver a solid 5% CAGR in distributions supported by positive market dynamics&rdquo , and this is supported by low gearing coupled with low cost of capital which empower the REIT with financial capacity to acquire accretive assets. &ldquo Given the larger-than-anticipated fund raising coupled with capital committed to acquire two further data centres worth a collective $111.7 million, we project KDC REIT&rsquo s gearing to remain fairly conservative at c.29%, keeping the powder dry for the REIT to acquire more assets,&rdquo say the analysts. Units of Keppel DC REIT closed at $1.20. |
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chengwh1
Elite |
23-Nov-2016 07:11
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Sorry, typo error in immediate previous note, meant to say : 1.155 level. As said back then, the price has bounced back as of today !! |
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chengwh1
Elite |
15-Nov-2016 21:14
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Bro,.. it' s okay, the price will bounce back up. Retreating to 1.55 and thereabout is just a natural reaction,... it WILL bounce back up !
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pnuklis
Master |
15-Nov-2016 09:43
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knee jerk dilution reaction is quite strong and has pulled down more than expected. If the stock price is around 1.15 what was the point in taking up the so called preferential rights at 1.155? Do not see the logic! Is this stock really going to benifit from the Government data collection efforts in 2017 and 2017?? Not much coming out from the management! What is the future for this stock? |
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chengwh1
Elite |
14-Nov-2016 15:06
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With the drop,... I' ve decided to buy-in at 1.155. I am ' lucky' , I sold off at 1.195 in July, just before the Rights Issue, and did not need to go thorugh the RI. Now that the RI is over, I am able to buy in again below my earlier Sell Price of 1.195.  Wonder if this is the right way to look at this,... guys ?? |
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