Keppel DC Reit

Keppel DC Reit | Add

Target price: S$1.52

April 3 close: S$1.44

CGSCIMB, April 2

KDCREIT has completed the acquisition of maincubes DC in Offenbach am Main, 10km from Frankfurt. We had expected the acquisition to be completed in end-Jun; we now input an additional three months of contribution from this asset.

We lift our FY18F-20 forecast distribution per unit (DPU) by 3.5-5.9 per cent, mainly because we previously assumed maincubes would be funded by equity, instead of debt. We like Keppel DC Reit for its exposure to positive fundamentals of data centres as well as acquisitive growth. Downside risk could come from higher-than-expected rate hikes. There are minimal lease expiries in FY18-19 forecast.

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