Keppel DC REIT - CGS-CIMB Research 2022-06-21: Deepens Footprint In China

Keppel DC REIT - Deepens Footprint In China

  • Keppel DC REIT (SGX:AJBU) has entered into agreements with Guangdong Bluesea Data Development Co Ltd (Bluesea) and its parent company Guangdong Bluesea Mobile Development Co Ltd to acquire two data centre (DC) facilities, on a fully fitted basis, in Jiangmen, Guangdong for RMB1,380.6m (~S$297.1m) or at a 0.6% discount to independent valuations. The two DCs will be named Guangdong DC2 and Guangdong DC3, upon completion of the deal.
  • We expect the acquisition to strengthen Keppel DC REIT’s foothold in China, Asia’s largest data centre hub. The properties will be leased to Bluesea on a triple-net basis for 15 years.
  • Management indicated that it intends to fund the acquisitions with a mix of debt, new equity and/or existing cash. The structure and timing of the equity fund raising exercise have not been determined as yet.
  • Based on management’s assumption of a 55/45 debt/equity funding structure, the proforma financial effect of the acquisition would be a 2.7% accretion to DPU and 1.5% uplift to its book NAV.
  • We raise our FY22-24F DPU forecast for Keppel DC REIT by 0.7-3.21% as we factor in the contributions from the new acquisitions and assume a 55/45 debt/equity funding structure. Our DDM-based target price for Keppel DC REIT rises to S$2.63.
  • Following its recent share price decline, Keppel DC REIT is trading at ~5.3% FY22F dividend yield.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

LOCK Mun Yee CGS-CIMB Research | 2022-06-21
SGX Stock Analyst Report ADD MAINTAIN ADD 2.63 UP 2.620

Previous report by CGS-CIMB:
2022-04-19 Keppel DC REIT - A Minor Near-Term Hiccup

Target prices by 3 other brokers at Keppel DC REIT Target Prices.
Listing of broker reports at Keppel DC REIT Analyst Report.

Relevant links:
Keppel DC REIT Share Price History,
Keppel DC REIT Announcements,
Keppel DC REIT Dividends & Corp Actions,
Keppel DC REIT News Articles


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