Broker Name: Maybank Research Pte Ltd
Date of Report: July 24, 2026
Excerpt from Maybank Research Pte Ltd report
Report Summary: Keppel DC REIT (KDCREIT SP)
- Action: BUY
- Target Price: SGD 2.60 (13% upside from current price of SGD 2.30)
- Ticker: KDCREIT SP
Key Investment Idea:
Keppel DC REIT continues to benefit from strong data centre demand and sector tailwinds. Despite a minor slip in occupancy due to non-renewals in the UK and Singapore, the REIT delivered a robust 1H distribution per unit (DPU) growth of 8.9% HoH and 11.3% YoY, exceeding consensus estimates. Growth was propelled by acquisitions, positive rental reversions, and higher interests in key assets.
Highlights:
- 1H Revenue & NPI: SGD 242.0m and SGD 210.4m, up ~15% YoY, driven by Tokyo DC3 acquisition and rent increases.
- Occupancy: Decreased to 92.5% (NLA basis), but contracted power occupancy is higher at 95%.
- Financial Health: Gearing improved to 34.0%. Cost of debt remains manageable at 2.7% and is expected to stay within 2.6%-2.8%.
- Growth Strategy: Focus on asset enhancements (e.g., SG DC 1) and hyperscale acquisitions in Japan, Korea, and Europe.
- Outlook: DPU estimates for FY26/27 have been raised by 1.7% and 2.1%. Favourable sector dynamics and resilient income underpin the positive outlook.
- Risks: Lease non-renewals, regional supply pressures, technology shifts, and regulatory/cost headwinds could challenge growth, but current fundamentals remain stable.
Implications:
Investors are advised to maintain or initiate BUY positions in Keppel DC REIT. The REIT offers attractive yield, strong growth prospects through accretive acquisitions and positive rent reversions, and is well-positioned to capitalize on data centre demand and digitalization trends. The SGD 2.60 target price reflects continued sector strength and operational resilience.
Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can access the full research report from the broker’s website: Maybank Research Pte Ltd research website.
