Keppel DC REIT (KPDCF – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Darren Chan from Phillip Securities upgraded the rating on the stock to a Buy and gave it a S$2.25 price target.
Darren Chan has given his Buy rating due to a combination of factors that highlight the growth potential and financial stability of Keppel DC REIT. The REIT’s distribution per unit (DPU) for the first quarter of 2025 increased by 14.2% year-over-year, driven by strategic acquisitions and reduced finance costs. These acquisitions, such as KDC SGP 7 & 8 and Tokyo DC 1, have contributed significantly to revenue growth.
Additionally, the REIT has maintained a strong portfolio occupancy rate of 96.5% and achieved positive rental reversions, indicating robust demand in the market. Despite some challenges, such as rental arrears from the Guangdong data centers, the overall financial outlook remains positive. The anticipated renewal of major colocation contracts in Singapore and stable finance costs further support the Buy rating, with the REIT trading at an attractive yield.
In another report released today, UOB Kay Hian also maintained a Buy rating on the stock with a S$2.55 price target.