Broker: UOB Kay Hian
Date of Report: Thursday, 09 April 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Stock: Keppel DC REIT (KDCREIT SP)
- Action: BUY (Maintained)
- Target Price: S\$2.82
- Current Price: S\$2.29
- Upside: +23.1%
- Key Idea: Keppel DC REIT is focusing on acquiring hyperscale data centres in Singapore, Japan, South Korea, and Europe, with a near-term emphasis on third-party acquisitions. Major pipeline assets from its sponsor are expected to be stabilised only in 2028/29.
- Singapore Market Strength: 62.5% of asset value is in Singapore, where vacancy rates are the tightest in Asia-Pacific (~1%), supporting positive rental reversions for 2026 and 2027.
- Growth Initiatives: Expansion includes new developments (SGP9 in Singapore, Western Tokyo in Japan) and asset enhancement initiatives for existing properties to boost revenue and prepare for AI-driven demand.
- Financials: Distribution per unit (DPU) forecast to rise from 10.4 S¢ in 2025 to 11.0 S¢ by 2028. Projected DPU yields are 4.5%–4.8%.
- Risk Management: 71% of borrowings are hedged at fixed rates; aggregate leverage is 35.3%.
- Valuation: Target price based on Dividend Discount Model (cost of equity: 6.5%, terminal growth: 2.8%).
- Actionable Insight: Investors may consider buying Keppel DC REIT for its stability, growth potential in data centre assets, and attractive yield driven by resilient demand in Singapore and ongoing expansion in Asia and Europe.
above is an excerpt from a report by UOB Kay Hian. Clients of UOB Kay Hian can be the first to access the full report from the UOB Kay Hian website : https://research-api.uobkayhian.com/assets/disclaimer/df64a6ea-7980-447c-ae9e-fd19b93257dc
