Broker: UOB Kay Hian
Date of Report: Friday, 24 July 2026

Excerpt from UOB Kay Hian report.

Report Summary

Stock: Keppel DC REIT (KDCREIT SP)
Action/Call: BUY (Maintained)
Target Price: S\$2.95
Current Price: S\$2.30 (at time of report)
Upside: 28.3%

• Key Idea: Keppel DC REIT remains a resilient play in the data centre sector, with a bright outlook driven by the expected substantial improvement in rent reversions in 2028, supported by large colocation lease renewals and potential acquisitions of stabilised assets in Singapore (SGP9) and Tokyo.
• Highlights:
  • 1H26 DPU grew by 11% year-on-year to 5.714 S cents, slightly above expectations.
  • Net property income rose 15% year-on-year on contributions from the newly acquired Tokyo Data Centre 3 and strong rental reversions.
  • Aggregate leverage remains conservative at 34.0%, giving the REIT significant debt headroom for future acquisitions and developments.
  • SGP9 and a Western Tokyo data centre are expected to be injected into the REIT post-2028, further supporting growth.
  • Portfolio is anchored by Singapore (62.8% of AUM), with growing exposure to Japan, Australia, and Europe. Hyperscale tenants account for 70% of rental income.
  • Positive rental reversion momentum is expected to continue in 3Q26, especially from Australia’s Gore Hill Data Centre.
  • Management maintains stable cost of debt guidance and is focused on expanding in key markets (Singapore, Japan, South Korea, Australia, Europe).
• Implications: The REIT’s solid fundamentals, proactive capital management, and clear pipeline for growth support the continued BUY rating, with a strong yield and upside potential from both rental growth and future asset injections.

Above is an excerpt from a report by UOB Kay Hian. Clients of UOB Kay Hian can access the full research report from the broker’s website: UOB Kay Hian research website