This is to give an update to my last post "Taking a Punt in Keppel DC REIT Rights Issue To Make Small Immediate Profit". Interestingly, market price of Keppel DC REIT ("KDC") did not drop below S$2.40 per unit after the rights issuance and in fact went up to S$2.43 per unit as at Oct 28, 2025. Anyway, I managed to get all my excess rights issue of 5,000 units of KDC units. So in a way, I have realised immediate profit of +S$750 from selling off 5,000 units my KDC holdings on Oct 6, 2025 and also managed to get back all the 5,000 units that I had earlier sold off via the excess rights subscription.
Future Prospects of KDC
The current distribution yield for KDC is at a miserable 4.2%. The stock market seems to be awarding a market premium per unit over the net assets per unit of KDC. This can be attributed to the M&A path that the management of KDC is embarking on which will mean growth in its DPU. With a market premium over its net asset, it will be easy for KDC to find yield accretive data centres to add on. This is the virtue cycle of a REIT that is highly sought after.
Parting Thoughts
I do not particularly rejoice in owning too many KDC units as I do not like the constant request for capital injection via rights issue. Personally, I thought that buying into its sponsor, Keppel Ltd, maybe a better alternative rather than investing into KDC at the current market price of S$2.43 per unit.
Good job on the profits. It is never wrong to take profit.
ReplyDeletePersonally, i am not a fan of this REIT, which imo, is grossly overpriced. There are data centres and there are data centres. The AI boom will indeed generate demand for DCs but ironically will also render a lot of existing DCs obsolete, esp those low spec, colocation-type data centres.
Interested readers can dive into Keppel DC REIT portfolio and verify for themselves the fraction of assets held by KDC, which would be rentable to a hyperscaler. In this respect, I feel like Digicore REIT offers a much better cost/value proposition based on both quality of DC assets and Sponsor pipeline.
Hi Edwin, how have you been? Thanks for dropping by and sharing your thoughts and comments on KDC. Interesting point on the fraction of assets rentable to hyperscaler.
DeleteFor Digicore REIT, I am still holding on to a position in this REIT but have reduced my exposure in 2023 and 2024 due to its management giving unit-holders a couple of heart attacks since IPO-remember the Cyxtera fiasco? Nonetheless, fully agree with you that at the current market pricing of Digcore REIT as well as its attractive distribution yield of 6.67% , it seems to be a better value proposition.
Hi Blade.
ReplyDeletePlenty of Reits to choose from. At this point I'm loading on Areit since it has not moved much yet. KDC is overpriced from the beginning.
Keppel still going strong right?
I doubled my position on liberation day. Then dumped them on a 10% gain.
Should have bought back when they announced ex DBS CEO become chairman.
Flew up ever since.
Anyway bro. I keep revising my TP on Keppel since it keep moving higher. How far do u think it'll go?
Hi Bro Damn, great to see you dropping by! Yup....good point....Areit looks kinda of interesting too!
DeleteAs for Keppel, its recent YTD 9mths numbers is amazing. If take out the loss from sales of M1, its net profit for 9mths cumulative would have increased 25% relative to last year.
I think it can hit S$11 per share based on my personal optimistic forecast and if they keep up the momentum to monetise their assets. Dividends should theoretically been going up too.