Saturday 4 November 2023

Keppel DC REIT Recovery of 7% Within A Week.

This will be a short post. The SGX and SREITS rallied over the last 2 days’ trading session. So I decided to sell off a just acquired small tranche of 1,500 units of Keppel DC REIT (“KDC”) to take a quick realized tiny profit at 7.1%. I am a pessimist. I do not think that SREITs is out of the woods yet with Powell’s announcement that the Fed will not do another hike in November 2023.  Neither am I convinced that there will be any material rate cuts in 2024 and 2025. It will take a while to keep the active money supply (from excessive printing over the past decade) from running amok. 

So for SREITs, the pertinent question is whether the effect of positive rental reversion or increased occupancy will outweigh  the grave negative downsides from ever higher interest rates for bank loans refinancing exercise over the next 2 years. I have redeployed the proceeds from KDC as well as excess funds into US renewable energy stock and also bond funds from Endowus to lessen the high concentration in SREITs. 


  1. Good decision to take profit bro. I was looking at 1.60 while it didn't reach there. I sold everything at 2.15 months ago. Some underestimate the possibility of the China master tenant who leased 3 DC going bankrupt and the DPU getting cut to 8 cents or lower. At 1.60, it's just 5% yield and hardly attractive.

    1. Hi Henry, always good to hear from you. Wow....good foresight, you managed to clear all your KDC at S$2.15. Agree with you fully that the risk of China default seems to be underestimated.

      Many folks in the past seems to treat KDC as a "Bond" and minimal risk due to data centre being "resilient' in demand. With interest rate rising and weakening balance sheets of many businesses, the equity nature of data centre REIT and the associated holding risks have all materialised over the past 1 year. :)

  2. Hi BK, it was in hindsight that I realized that my buy price was too high. Didn't make any money except the dividend collected. The other reit with the same bond like mentality is Parkway Life. Some were buying when the 10Y interest rate was 2%+.