Where would Keppel DC REIT's next buy be?

The REIT could spend as much as $600m in deals, and it won’t be in Singapore.

Keppel DC REIT is expected to spend as much as $600m in acquisitions in FY2020, with their buys likely coming from Europe and Australia, reports DBS Group Research.

DBS analyst Derek Tan revised the acquisition forecast upwards from $350m previously after taking into account the company’s current yield of c. 3.3%. The projection equals more than a 20% growth in portfolio.

Tan noted that Europe and Australia are the two markets most likely for the REIT to further expand given their attractive spreads (cap rate–funding costs). The lack of data centres for sale in Singapore limits the REIT’s ability to further add to its Singapore portfolio.

Over the last three years, the REIT has acquired close to $400m in third party assets located in the two markets mentioned: a $30m centre in Australia, a $101.3m in Ireland, and two centres in Germany worth $125.3m and $130m, respectively.

The company’s deepened presence in Australia and Europe gives Keppel DC REIT headway to grow further and have more access to deals in these two markets, said Tan. However, such deals will likely be of a smaller quantum compared to acquisitions in Singapore

“Based on our understanding, pipeline assets from the sponsor are mostly in Europe, more specifically Frankfurt and The Netherlands. But these assets need time to stabilise and will likely only be ready for KDC REIT after FY2020 and are thus not ready for injection in the immediate term. There are currently no assets in Singapore for further injection into the REIT,” said Tan.

Keppel DC REIT is also expected to rely entirely on third-party acquisitions for the fiscal year. 

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

ARA LOGOS is currently on the 13th spot.
Meanwhile, the demand for petrochemical exports benefitted from this same crisis.
This is expected to speed up the electronic exchange of trade documents.
This is in support of achieving Absolute Zero Carbon by 2040.
Adults will only shop if goods are discounted by at least 48%, survey says.   About 54% of 1,001 Singaporean adults have plans to shop during the Black Friday sales but only if prices of goods are discounted by at least 48%, a survey from Finder.com showed.
This move is in line with its goal to accelerate recommerce growth in SEA.
The notes were released under its $3m Multicurrency Medium Term Note Programme.
Singtel showed the most growth.
Re-exports also saw an increase of 16.4% in the same month.
The marine company apologised to its workers at the dorm.
SG electricity demand peaked at 7,667MW in October 2021.
The two aim to accelerate the progression of AI.
It will focus on sustainable opportunities for companies in Singapore.
Cargo load factor, however, was down by 1.6% YoY to 97.3%.
Despite this, KF pegs their estimated total sales for the year at 13,000 units.