Should You Invest In Keppel DC REIT [Fundamental Analysis]

In this article, we'll be conducting a fundamental analysis of Keppel DC REIT and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having a high degree of capital preservation ability.

Information Is Accurate Up To Nov 2023

Business Description

Keppel DC REIT is an Industrial REIT that was listed in 2014 and owns 23 industrial properties across 9 countries that are mainly designed to be data centers.

What I Like About Keppel DC REIT:

• Distribution per unit has been rising consistently (CAGR: 5~%) despite the increase in units thereby signifying the manager's capabilities to deliver yield accretive acquisitions
  

• Overall portfolio’s WALE is high & occupancy rate is resilient
  

• Strong pipeline from sponsor that could contribute to future portfolio expansion.

What I Do Not Like About Keppel DC REIT:

• 52% of the portfolio has an underlying land lease of less than 30 years (All the data centers in Singapore)