Keppel DC REIT Completes S\$404.5 Million Preferential Offering: What Investors Need to Know

Key Points of the Announcement

• Keppel DC REIT has successfully issued 180,562,518 new units at an issue price of S\$2.24 per unit under a pro-rata, non-renounceable preferential offering.
• The fundraising exercise raised gross proceeds of approximately S\$404.5 million.
• The offering ratio was 80 new units for every 1,000 existing units, based on holdings as of 5:00 p.m., 30 September 2025.
• Total units outstanding now stand at 2,437,593,999 following the issuance.
• New units commence trading on the Main Board of the Singapore Exchange (SGX-ST) from 9:00 a.m. today.

Details of the Preferential Offering

The preferential offering was fully underwritten, ensuring all new units were taken up. The new units rank pari passu in all respects with existing units, including the right to receive distributable income from 1 July 2025 to 31 December 2025, and all future distributions thereafter.

This means that investors who subscribed and were allotted new units will benefit from the upcoming distribution period, potentially increasing their income yield.

Potentially Price-Sensitive Information

• Significant Capital Raising: The injection of S\$404.5 million strengthens Keppel DC REIT’s balance sheet, positioning it for future acquisitions or expansion. This could be positive for share price if the funds are deployed effectively.
• Dilution Effect: The issuance of a substantial number of new units (180.6 million, a 8% increase in total units) may result in EPS dilution in the short term. Existing shareholders who did not participate might see their ownership percentage reduced.
• Immediate Income Rights: New units will receive distributions from 1 July 2025, aligning interests and providing immediate income potential to investors who bought in.
• Liquidity Impact: Listing of additional units on the SGX-ST may improve trading liquidity but does not guarantee a liquid market.

Legal and Regulatory Notices

• The preferential offering was not open to retail investors in the United States, European Economic Area, Hong Kong, United Kingdom (except eligible UK investors), Japan, Malaysia, or Australia due to regulatory restrictions.
• The new units are considered prescribed capital markets products and excluded investment products under Singapore regulations, making them suitable for a wider range of investors under local rules.
• No public offering was made in restricted jurisdictions, and the units are intended for trading only on the SGX-ST.

Implications for Shareholders

Shareholders should note the following implications:

• Potential Upside: If the capital raised is used for accretive acquisitions or expansion, there could be upside for Keppel DC REIT’s future distributions and share price.
• Risk of Dilution: Shareholders who did not participate in the preferential offering may experience dilution of their holdings and earnings per unit.
• Short-Term Volatility Possible: The enlarged unit base and capital inflow may lead to short-term price movements as the market digests the news and as investors reposition portfolios.
• Distribution Policy Unchanged: New and existing units will receive distributions for the July–December 2025 period. This may support the share price if the REIT maintains or raises its payout.

Forward-Looking Statements and Risks

The announcement includes cautionary notes about forward-looking statements, highlighting risks such as interest rate trends, competition, operating expenses, government policy changes, and the availability of future financing. Investors are advised that past performance is not indicative of future results and that the value of units and income derived can fluctuate. The REIT manager does not guarantee unit values or returns.

Conclusion

Keppel DC REIT’s successful S\$404.5 million capital raise through a preferential offering is a significant corporate event, providing the REIT with substantial funds for potential growth and expansion. Investors should monitor how the proceeds are deployed and assess the impact of dilution against the REIT’s growth plans and distribution policies. Given the scale of the issuance and immediate income eligibility of new units, this development could be a key mover for Keppel DC REIT’s share price in the coming quarters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, solicitation, or an offer to buy or sell securities. Investors should perform their own due diligence and consult professional advisors before making investment decisions. The author and publisher do not guarantee the accuracy or completeness of this article, and accept no liability for any loss arising from reliance on it.

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