Keppel DC Reit

Keppel DC Reit: Credit Suisse initiates coverage with Outperform with TP $1.10 offering 6.6% FY15E yield. The first pure-play data centre REIT, demand is expected to continue its upward trajectory supported by growing data creation and storage needs, a pick-up in outsourcing of data centre requirements, clouding-computing and compliance/regulatory needs. Meanwhile, supply outlook is supportive of rent growth. Earnings growth should be underpinned by organic reversions with step-ups of between 2-4%/year, with further potential upside from acquisitions. 27.8% gearing implies S$200m of debt headroom. Separately, Goldman Sachs also initiated coverage with similar investment theses, but sees it as fairly valued, recommends Neutral and TP $0.99