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Keppel DC REIT - OCBC Investment 2020-10-21: Another Solid Performance

KEPPEL DC REIT (SGX:AJBU) | SGinvestors.io KEPPEL DC REIT (SGX:AJBU)

Keppel DC REIT - Another Solid Performance

  • Keppel DC REIT's 3Q20 DPU jumped 22.1% y-o-y.
  • Occupancy inched up to 96.7%.
  • Included into Straits Times Index with effect from 19 Oct; awaiting acquisitions as next re-rating catalyst.



Keppel DC REIT's 3Q20 DPU slightly above our expectations

  • Keppel DC REIT (SGX:AJBU) provided a business update for 3Q20. Revenue and NPI surged 46.0% and 47.6% y-o-y to S$67.7m and S$62.4m, respectively, while DPU grew 22.1% to 2.357 S cents.
  • For 9M20, Keppel DC REIT’s NPI wasup 37.1% to S$176.6m, and DPU rose 16.5% to 6.732 S cents, with the latter forming 76.9% of our FY20 forecast.





Operational metrics remain solid

  • Keppel DC REIT’s portfolio occupancy improved 0.6 ppt q-o-q to 96.7% (as at 30 Sep 2020). This was driven largely by Keppel DC Dublin 1, which secured a new client and thus boosted the property’s occupancy by 17.8 ppt to 81.1%.
  • Keppel DC REIT’s proactive leasing efforts and robust industry outlook has led to a further ramp up in its portfolio occupancy rate after the quarter end, underpinned by Keppel DC Singapore 1 (+1.8 ppt to 91.0% due to client expansion) and Keppel DC Singapore 2 (+4.7 ppt to 98.2% due to new client). This came from the same tenant from the telecom sector due to 5G deployment.
  • Rental reversions were more mixed, with half in the positive territory, some coming in negative and the rest flat.

Acquisitions remain a possibility for this year






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-10-21
SGX Stock Analyst Report BUY MAINTAIN BUY 3.41 UP 3.32



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