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DPU plunged at Keppel DC REIT.

Tuesday, March 21, 2017


Just wondering if you are familiar with Keppel DC Reit?

I bought into it some time ago, lured in by its 'good potential', but as of last dividend payout, it's one of those cases where NPI went up but DPU dropped by 20%.
Not an encouraging sign.
But the company presentation said that things will get better because income from its new acquisition will 'kick in' by next payout. However it's hard for me to gauge if it'll make up the 'shortfall' of 20%.
Extrapolating from the most recent dividends, its annual yield would be only 4.7%. DBS still rates it as a BUY though.

I don't have this. I avoided.

I must say I have not been following developments though.


I really didn't like the part where it's NPI went up but DPU dropped 20%.

Sounds like another Keppel REIT.

Plain English guide to data centres.

For anyone who might be interested, see my one and only blog on Keppel DC REIT (well, not anymore, I guess) and why I avoided investing in it:

Is Keppel DC REIT an attractive investment?

There were two reasons for me to avoid investing in this REIT. 

Now, there might be a third one.


AK71 said...

Keppel DC REIT’s ($1.225, unchanged) distributable income increased from $14.7 million in 1Q 2016 to $21.8 million in 1Q 2017, translating to a 47.6% growth year-on-year, thanks to the one-off capital distribution in relation to the Keppel DC Singapore 3 acquisition...

The one-off capital distribuĈŸ on of approximately $1.7 million for the month of December 2016 arose from the later completion of Keppel DC Singapore 3 on 20 January 2017 and where the vendor had agreed that all the rights and obligations shall pass to the REIT as if completion had occurred on 1 December 2016.

Year-on-year, there were lower rental income arising from a client downsizing its requirements in Keppel DC Dublin 1 in 1Q 2016, as well as lower variable income from Keppel DC Singapore 1 and Keppel DC Singapore 2 due to lower recurring and power revenue.

The Manager remains confident of the data centre market’s growth potential although near-term pressure on rental rates is expected with data centre supply coming online in Singapore.

Excluding the one-off capital distribution of approximately $1.7 million (equivalent to 0.15 cents per Unit), the adjusted annualised distribution yield would have been 5.8%. Price to book is 1.28x.

Source: Lim & Tan.

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