Keppel DC REIT (SGX:AJBU) reported another strong set of results. Its 2H25 gross revenue and net property income (NPI) jumped 50.3% and 57.0% y-o-y to S$230.1m and S$200.4m respectively. This was driven by organic growth and contributions from acquisitions, but partially offset by absence of income from divestments.
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Expect healthy operating metrics to continue.
4Q25 rental reversions came in at only 2%. This was because there were no major contract renewals during the quarter. Rental reversion figures reported each quarter depends on the type and location of leases being renewed. For FY25, Keppel DC REIT had achieved overall portfolio rental uplifts of ~45%.
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Keppel DC REIT received notice from the sole tenant at its GV7 Data Centre in London that its lease would not be renewed upon expiry in February 2027. This asset contributed only ~0.5% of Keppel DC REIT’s assets under management (AUM), and management has a long lead time to find a replacement.
In Singapore, its Keppel DC Singapore 1 asset had a low occupancy of 53.3%. This is worth monitoring as Keppel DC REIT had been carrying out feasibility studies on asset enhancement initiatives and speaking to prospective tenants. It is also focused on improving operational efficiencies, and cited the example of Keppel DC Singapore 8, where it was looking to increase additional saleable power capacity to boost incremental income.
In China, while we believe arrears remain, the situation has possibly bottomed out given China’s strategic focus shift towards AI and positive developments surrounding the potential sale of Nvidia’s H200 GPU chips into China.
Aggregate leverage ratio rose 5.5ppt q-o-q to 35.3%.
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Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
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