- Keppel DC REIT reported strong 1H25 results, with DPU of 5.133 cents that was slightly ahead of our projections (~54% of FY25 estimates) and consensus estimates.
Strong 1H25 DPU
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- Rental reversions continued to show strong momentum in 1H25, underpinned by the renewal of a major hyperscale lease at SGP 4 in 2Q25. For the first half of the year, the REIT achieved an average positive rental reversion of approximately +51%, building on the already impressive +40% rental reversions recorded in FY24.
Slight dip in portfolio occupancy rates but higher rents to offset vacant space.
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- During the quarter, Keppel DC REIT also disclosed that the tenant at its Cardiff DC will be terminating their lease in June 2026. However, this asset represents a relatively small portion of the portfolio, accounting for only ~0.5% of AUM.
- Given the strong positive rental reversions achieved during the quarter, on top of the solid performance in prior periods, we believe these gains will more than offset the marginal dip in occupancy, helping to sustain overall portfolio resilience.
- Furthermore, Keppel DC REIT’s portfolio remains under-rented, especially in Singapore. Additionally, lease renewals will continue to serve as a catalyst to earnings.
Improved capital management metrics with savings in financing costs.
- Read more at SGinvestors.io.
