DigiCore REIT Roared Back To Life- 17% Surge In A Single Week!

DigiCore REIT jumped 12% (and as high as 14%) in a single day today to US$0.56 per unit as at 20 July 2023. This is an impressive 17% upswing in its unit price performance within a single week given that DigiCore REIT was languishing at US$0.480 per unit last week. It looks like the market has assessed and decided that the default risk of its 2nd largest tenant, Cyxtera is over. I tried to google but could not find any latest updates on the bankruptcy case. But I think that most likely, the stalking horse bid has been successfully selected which thus gives rise to the re-rating. 

Please refer to my previous post: “US Digital Core REIT- Worst Maybe Over With Unraveling of Stalking Horse Bid by 16 July 2023”
 

DigiCore REIT response to SGX query on the sudden jump in unit price

Manager’s Response: The Manager is aware that a brokerage firm has circulated a client bulletin reporting that final bids for the REIT’s second-largest customer were due today and it had received at least six letters of intent for its business, which the brokerage firm hypothesized should be a good sign for providers with exposure to this customer, as the brokerage firm speculated any intention to reject its existing leases likely would have been done prior to today’s deadline – which may or may not be a faulty assumption, as the sale process is still underway.

In addition, the brokerage firm noted that the recent share price rally implies that the REIT is on track to be included in the FTSE NAREIT Developed Asia Index as early as the next review in September 2023.

Parting thoughts

I am keeping my fingers crossed that DigiCore REIT can break the US$0.60 per unit level within the next 2 months. I am currently in a dilemma over whether to sell off part of my holdings in DigiCore REIT acquired recently so as to take immediate profit or to hold on to it for a longer term view.