- Cyxtera, Digital Core REIT (SGX:DCRU)’s second-largest tenant accounting for 22.6% of annualised rent, was downgraded by Moody’s from B3 to Caa2 on 17 Feb 23. In the event that Cyxtera files for bankruptcy protection, our FY25 DPU forecast and target price for Digital Core REIT would be reduced by 15% and 14% respectively to US$0.035 and US$0.67 assuming Digital Core REIT backfills half of the vacant data centre spaces.
- - Read this at SGinvestors.io -
The second shoe to drop.
- - Read this at SGinvestors.io -
- Cyxtera, Digital Core REIT (SGX:DCRU)’s second-largest tenant accounting for 22.6% of annualised rent, was downgraded by Moody’s from B3 to Caa2 on 17 Feb 23. In the event that Cyxtera files for bankruptcy protection, our FY25 DPU forecast and target price for Digital Core REIT would be reduced by 15% and 14% respectively to US$0.035 and US$0.67 assuming Digital Core REIT backfills half of the vacant data centre spaces.
- Digital Core REIT provides FY25 distribution yield of 8.7% (vs Keppel DC REIT (SGX:AJBU): 5.3% and Mapletree Industrial Trust (SGX:ME8U): 5.7%). Maintain BUY. Target price: US$0.78.
- We expect Cyxtera Technologies, which was described as a global colocation and interconnection provider and rated B3 in Digital Core REIT’s IPO prospectus dated 29 Nov 21, to be under greater financial strain as financing for technology companies is tightened in the aftermath of the demise of Silicon Valley Bank.
- Read more at SGinvestors.io.
