$KEPPEL DC REIT(AJBU.SI)$gapped down today below the uptrend line after posting 2022Q1 results. It reported its first quarter net property income slipped 1.4 percent on-year to S$60.13 million and distribution per unit (DPU) came in at 2.466 Singapore cents, up 0.2 percent from 2.462 Singapore cents in the year-earlier quarter. So why did KDC fall despite increasing dpu? 

The main reason is reduced property income. The reduction in property income has already started since 2021H2 (124k in 2021H2 vs 129k in 2020H2) and we have also seen a continued reduction this quarter. Do take note that reit managers are required to distribute at least 90% of the reit's income, so they may increase the distribution percentage to make up for thereduced property income.  Therefore, You may see the dpu increasing and think the reit is doing well. DO NOT BE FOOLED!

KDC is regarded as a high growth reit and such stagnation of property income means it will be heavily punished. The immediate support is at 2.11. Failure to hold this level may mean a further drop to 1.98 region. Assuming annual dpu is 9.84c, the yield at 1.98 is about 4.97%. Personally I will not be adding to my KDC shares until then.