Brokers' Take: Analysts Lower Price Targets on Keppel DC Reit on Rental Overhang

The Business Times01-29

CGS-CIMB and DBS Group Research have reduced their near-term earnings projections for Keppel DC Real Estate Investment Trust (Reit) in view of rental arrears owed by its tenant in Guangdong, though ...

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It lowered its price target to S$2.20 from S$2.45 previously, to account for a more than 15 per cent reduction in distribution per unit (DPU) estimates for the year. The research house however maintained its “add” call, due to a positive outlook for the rest of Keppel DC Reit’s portfolio, which in its view continues to benefit from structural growth in the data centre space.It also highlighted a potential sooner-than-anticipated resolution with Bluesea as an “immediate catalyst, emphasising the Reit’s potential for recovery”, given its unit price decline when concerns over the rental defaults first emerged.DBS’ analysts are also positive on a recent High Court ruling in favour of Keppel DC Reit, which acknowledged the Reit’s claim for outstanding rents owed by another tenant, DXC Technology Services Singapore.This initial court decision “strongly suggests Keppel DC Reit’s high likelihood” of securing complete rental payment from DXC, said the analysts, ahead of the trial that is slated to begin in February.Units of Keppel DC Reit were trading S$0.05 or 2.8 per cent lower at S$1.71, as at 4.03 pm on Monday.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2407839469"}