Analyst Darren Chan of Phillip Securities maintained a Buy rating on Keppel DC REIT, retaining the price target of S$2.37.
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Darren Chan has given his Buy rating due to a combination of factors, including resilient income growth and supportive portfolio metrics. Distributions per unit have risen meaningfully on the back of recent data centre acquisitions and positive leasing outcomes, while overall occupancy and lease tenure remain robust, providing good visibility on future cash flows and supporting a healthy implied yield.
At the same time, funding risk appears contained, with a low and largely fixed borrowing cost, moderate gearing and ample debt capacity to pursue further accretive deals in key data centre markets. Although rental uncertainties at the Guangdong assets and broader macro risks persist, the potential recovery of overdue rents and continued strong rental reversions provide upside optionality that underpins the Buy recommendation.
In another report released yesterday, CGS International also reiterated a Buy rating on the stock with a S$2.64 price target.