KeppelDC REIT Has Been Correcting - Potential $2.15 Coming?

3Fs
2021-10-11

$KEPPEL DC REIT(AJBU.SI)$ has been one of the performing stars in the SREIT universe for quite some time since its’ IPO.


Investors who are looking to buy this REIT has been given very little to no chance to add on to their shares as the company continues to shoulder on its meteoric rise in the past few years.


Since hitting the peak of $3.13 sometime in October last year, the company has undergone quite a bit of correction over the past few months, breaking it’s support each time as it moves lower.


With the company trading at $2.34 today, is this a good opportunity to add on to the shares given their longer term prospect?




Maiden Acquisition in China with a high 9% NPI Yield:


The maiden acquisition in Guangdong Data Centre located within the Greater Bay of China certainly provides a nice overall accretive bump to its overall earnings yield.


After all, we are talking about a net NPI yield of 9% which is funded via equity which at the time of the acquisition, it was trading close to P/NAV of 2x. DPU accretion as a result of the acquisition is expected to increase by about 2%.


Although the acquisition comes with a triple net basis sales leaseback for 15 years (increase wale), the land tenure is a leasehold with approximately 46 years remaining. Still, I do think the NPI yield of 9% for a data centre makes up for the shorter leasehold.


This deal is expected to be completed in the 2H of this year and should start contributing within the next reporting quarter.




Smaller Acquisitions in Europe and Sydney:


The company has been very active in making acquisitions and gaining traction in their footprint diversifying their bases outside.


Earlier in the 1H, they have completed the Intellicentre 3 acquisitions in Sydney for about $26m with a 20-year triple net master lease agreement for a freehold asset.


Recently earlier this month, they have announced another acquisition for a data centre building in Eindhoven campus, Netherlands for another $60m acquisitions. This comes with a 6.8 years of WALE on a freehold piece of land that is expected to increase and boost its DPU further.



Technical Chart:


From a technical chart view, I like what I am seeing in the chart.


On the weekly chart, the share has been respecting the EMA100 support (yellow trendline) for a long time and has rebounded off the support for more than 4 times in the past 4 years, including the big one during the Covid-19 pandemic.


However, it recently broke this strong support and is now likely to head down to the EMA200 at $2.15.


This translates to an annualized yield of 4.5% and probably even more if we consider the upcoming acquisitions in China and Netherlands once completed.


I’ll likely wait for this level to park some of my money for the longer term portfolio.



免责声明:上述内容仅代表发帖人个人观点,不构成本平台的任何投资建议。

精彩评论

  • MilkTeaBro
    2021-10-11
    MilkTeaBro
    Reits is defensive product. you can take it as 3-4% interest bond. Then you understand it better. Looked the government bond yield in US and Singapore,  all climb up, bond price is opposite direction.
    • MilkTeaBro回复MHh
      I buy it a little when it drop big. but I almost don't sell it because it never raise sharply. just hold for long term dividend, it is part of portfolio.
  • Wayneqq
    2021-10-11
    Wayneqq
    Well written[Strong] i am waiting for it to dip since 2019…
  • TASOGARE
    2021-10-12
    TASOGARE
    Not suitable for investment recently. The price is unstable
  • 吉吉祥祥
    2021-10-13
    吉吉祥祥
  • 邵军
    2021-10-13
    邵军
    运鸿才是王道
  • 小虎妮子
    2021-10-13
    小虎妮子
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