Keppel DC

Keppel DC: CLSA initiate coverage with Buy and TP of $1.29
-72% exposure to Asia Pac datacentres seens as most direct play to ride on Asia data boom
-organically, rental step-up and development assets expected to support 3-year DPU CAGR of 4%
-Inorganically, Keppel DC is expected to double asset based to $2b by 2018 through acquisitions
-CLSA noted key risk stem from higher-than-expected capex given high fit-out costs
-House believes mgmt guidance for annual capex equivalent to 3.8% of revenue is sufficient
-Currently trading at forward yield of 6.4%, more than double the yield of US DC REITs