Monday, January 18, 2016

Keppel DC REIT

Keppel DC REIT: Reported its 4Q15 results, in line with OCBC expectations, although its DPU of 1.64¢ came in slightly above management’s IPO forecast by 1.9%. Looking ahead, KDCREIT has 11.8% of its leases (by leased lettable area) expiring in FY16. While management has obtained a verbal agreement for renewal from one major tenant, another one would be downsizing its take-up at Citadel 100 Data Centre.

Notwithstanding this setback, management does not expect the resulting revenue decline to have a material impact to its distributable income. OCBC maintains Buy on the counter with TP of $1.24.

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