The muted market reaction is largely due to changes in global energy demand and supply. Demand has weakened as the adoption of electric vehicles and solar energy reduces oil consumption, while China has significantly cut its oil imports from an average of 11.5 million barrels per day to about 8 million barrels per day since April. On the supply side, Gulf producers such as Saudi Arabia and the United Arab Emirates have diverted exports through alternative pipelines that bypass the Strait of Hormuz, reducing dependence on the waterway. Additional production from non-Gulf oil exporters has also helped stabilise supplies.

Overall, the global oil market appears to have adapted to the geopolitical risks in the region. Investors now seem more confident that alternative supply routes and changing demand patterns can cushion disruptions, suggesting that the strategic importance of the Strait of Hormuz has diminished compared with the past. Although the conflict may continue for months or even years, the market has shown a greater willingness to tolerate uncertainty without triggering severe price shocks.

Keppel DC Reit plans to gradually vacate its Keppel DC Singapore 1 (KDC SGP 1) data centre in preparation for a potential redevelopment. The ageing facility, originally built in the 1990s and converted into a data centre in 2001, currently has a low occupancy rate of 46.5%, a weighted average lease expiry of 1.1 years, and a land lease that expires in 2055. Management said the vacating process will be carried out gradually.

The redevelopment plan comes amid strong and sustained demand for data centres, particularly from technology hyperscalers, which remain a key customer segment due to their strong credit profiles and growing capacity needs. Half of Keppel DC Reit’s top 10 tenants are hyperscalers, with its largest tenant contributing 43.5% of the portfolio’s rental income. The Reit also benefited from positive rental reversions, acquisitions of new data centre assets, and strong leasing performance at its Gore Hill data centre in Sydney, which is expected to double its income from end-2026 onwards.

For the first half of 2026, Keppel DC Reit reported strong financial performance, with revenue increasing 14.5% to S$242 million, net property income rising 15.1% to S$210.4 million, distributable income growing 18.5% to S$150.7 million, and distribution per unit (DPU) climbing 11.3% to S$0.05714. The Reit maintained a healthy balance sheet with aggregate leverage of 34%, an average cost of debt of 2.6%, and an interest coverage ratio of 6.9 times.

Overall portfolio occupancy declined to 92.5% from 95.6% in the previous quarter due to a contract expiry at its Cardiff data centre. Excluding this small asset, portfolio occupancy would have been 95.3%. Despite the strong earnings, the Reit’s units fell 0.9% to S$2.32 during midday trading.

Singapore’s construction sector has become one of the strongest drivers of the economy, recording an 11.8% year-on-year growth in the first quarter of 2026, with advance estimates showing continued expansion of 6.2% in the second quarter. This growth is supported by strong activity in both public and private construction projects, including residential, industrial, and institutional developments. The Building and Construction Authority (BCA) expects construction demand to remain high, forecasting between S$47 billion and S$53 billion in project awards for 2026, following S$50.5 billion in 2025, with annual demand projected at S$39 billion to S$46 billion from 2027 to 2030.

The sector’s growth is driven by a wide range of major infrastructure and development projects, such as Changi Airport Terminal 5, the Marina Bay Sands expansion, Tengah General and Community Hospital, and extensions to the MRT network. These projects not only strengthen Singapore’s transport, healthcare, and digital infrastructure but also generate demand across related industries such as engineering, construction materials, logistics, equipment, and professional services, reinforcing construction’s role in supporting broader economic growth.

Investor confidence has also strengthened alongside the sector’s expansion. Among the 20 largest Singapore-listed construction-related companies, share prices have risen by an average of 56% over the past year, while average daily trading turnover has nearly quadrupled. The strongest-performing stocks included International Cement Group, GRC, Soilbuild Construction, Koh Brothers Eco Engineering, and Huationg Global, reflecting strong investor interest across various segments of the construction value chain.

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