CGS-CIMB analyst Lock Mun Yee has reiterated their bullish stance on KPDCF stock, giving a Buy rating on September 23.
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Lock Mun Yee has given his Buy rating due to a combination of factors that highlight the strategic benefits of Keppel DC REIT’s recent acquisition. The REIT’s decision to purchase a significant stake in a hyperscale data center in Tokyo is expected to enhance its portfolio by increasing occupancy rates and extending the weighted average lease to expiry. This acquisition not only strengthens Keppel DC REIT’s presence in Japan but also secures a long-term lease with a major global tenant, which includes built-in rent escalation clauses.
Additionally, the financial strategy to fund the acquisition through a mix of debt and equity is projected to be accretive to the distribution per unit (DPU), with an estimated increase of 2.8%. This approach maintains the REIT’s financial flexibility, allowing it to pursue further growth opportunities. Lock Mun Yee also notes potential catalysts for stock re-rating, such as improved tax transparency and other growth prospects, while acknowledging risks like lower-than-expected occupancy or rental reversions due to broader economic conditions.
In another report released on September 23, UOB Kay Hian also maintained a Buy rating on the stock with a S$2.64 price target.