Broker Name: CGS International
Date of Report: October 27, 2025
Excerpt from CGS International report.
- Keppel DC REIT (KDCREIT) delivered a 9M25 DPU of 7.67 Scts, broadly in line with expectations, supported by strong rental reversions (+10% in 3Q25), contributions from recent acquisitions, and lower financing costs.
- The REIT maintains a robust balance sheet with low gearing (29.8%), enabling further inorganic growth, and has guided for continued positive rental outlook due to low market vacancy rates in Singapore and ongoing asset enhancement initiatives.
- Management plans to complete the acquisition of a 98.47% stake in Tokyo DC3 by end-2025, expected to positively impact contributions from FY26F, and will continue to pursue acquisitions in Japan, South Korea, and Europe.
- The stock retains an “Add” rating with a DDM-based target price of S\$2.59, with key catalysts including potential earnings upside from tax transparency, collection of arrears, and higher-than-forecast rental reversions; main risks are lower occupancy or weaker rental growth.
- KDCREIT is ranked mid-tier among Singapore REITs on ESG metrics, with ongoing efforts to reduce emissions, increase energy efficiency, and expand green financing; no ESG premium or discount is currently factored into valuation.
- Financial forecasts project continued growth in gross property revenue and net property income through FY27F, stable dividend yields above 4%, and consistently high occupancy rates nearing 98%.
Report Summary
- Keppel DC REIT remains well positioned for both organic and inorganic growth, supported by strong rental reversions, healthy balance sheet, and a clear pipeline for future acquisitions.
- Ongoing ESG initiatives and prudent financial management underpin the REIT’s stable outlook, with a maintained “Add” rating and moderate upside potential.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com
