Keppel DC REIT Posts Record-High DPU Performance February 9, 2026
About Keppel DC REIT
Keppel DC REIT is a leading data centre real estate investment trust that owns and operates a diversified portfolio of data centre properties across multiple markets including Singapore, Australia, Ireland, China, and the UK. The REIT focuses on providing critical digital infrastructure to support the growing demand for cloud computing and digital services.
Keppel DC REIT has achieved record-high distribution per unit (DPU) performance, with 2H25/FY2025 DPU reaching 5.248/10.381 Singapore cents respectively. This represents an impressive year-over-year growth of 7.1% and 9.8% respectively. This strong performance was primarily driven by strategic acquisitions of Keppel Data Centre SGP 7 & 8 and Tokyo Data Centre 1 & 3, enhanced contributions from contract renewals and escalations, and reduced finance costs.
The REIT maintained stable portfolio occupancy at 95.8% quarter-over-quarter, while demonstrating exceptional rental reversion strength of +45% for FY2025. Although 4Q25 rental reversion was modest at +2% due to the absence of major contract renewals, the underlying fundamentals remain robust. Portfolio valuations increased significantly by 25.6% year-over-year to S$6.1 billion, driven by acquisitions, with same-store valuations rising 3.7%.
Investment Merits and Outlook
Phillip Securities Research has upgraded Keppel DC REIT from NEUTRAL to ACCUMULATE, citing recent share price performance, with a target price of S$2.37. Several positive factors support this recommendation, including stable occupancy rates, lower finance costs with average debt costs declining to 2.8% in 4Q25, and higher portfolio valuations led by strong performance in Singapore and Ireland markets.
The REIT benefits from a conservative leverage position at 35.3%, providing S$530 million of debt headroom against the internal cap of 40%, which supports future acquisition opportunities. The potential recovery of over S$50 million in overdue rent from Guangdong Bluesea Data Development Co remains a key catalyst, while the anticipated granting of tax transparency for Data Centre SGP 7 & 8 should provide additional DPU upside.
Looking ahead, strong positive rental reversion momentum is expected to continue into FY26, particularly from Singapore colocation lease renewals, with the stock trading at FY26e DPU yield of 4.8%.
Frequently Asked Questions
Q: What drove Keppel DC REIT’s strong DPU performance in FY2025?
A: The record-high DPU growth of 9.8% year-over-year was driven by acquisitions of KDC SGP 7 & 8 and Tokyo DC 1 & 3, stronger contributions from contract renewals and escalations, and lower finance costs.
Q: How strong was the rental reversion performance?
A: FY25 portfolio rental reversion was exceptionally strong at +45%, though 4Q25 was more modest at +2% due to no major contract renewals during that quarter.
Q: What is Phillip Securities Research’s recommendation and target price?
A: Phillip Securities Research upgraded the REIT from NEUTRAL to ACCUMULATE with a target price of S$2.37, down from the previous S$2.40.
Q: What is the current occupancy rate and leverage position?
A: Portfolio occupancy remained stable at 95.8% quarter-over-quarter, while aggregate leverage stands at 35.3%, providing S$530 million of debt headroom against the internal cap of 40%.
Q: How did portfolio valuations perform across different markets?
A: Portfolio valuations rose 25.6% year-over-year including acquisitions and 3.7% on a same-store basis, led by Singapore (+6%) and Ireland (+13%), offsetting declines in Australia (-3.5%), China (-16%), and the UK (-7%).
Q: What are the key catalysts for future performance?
A: Key catalysts include the potential recovery of over S$50 million in overdue rent from Bluesea, the granting of tax transparency for SGP 7 & 8 and continued positive rental reversion momentum from Singapore colocation lease renewals.
Q: What is the expected cost of debt outlook?
A: The average cost of debt declined to 2.8% in 4Q25 from 2.9% in 3Q25, with FY2025 average at 3%. The FY26e cost of debt is expected to decline further to approximately 2.7%.
Q: What is the current dividend yield?
A: The stock trades at an FY26e DPU yield of 4.8%.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
About the author
Darren Chan
Darren has over seven years of experience across both the buy-side and sell-side. During his tenure as a fund manager, he managed multiple funds and mandates, including dividend income, growth, customised, Singapore-focused, and regionally focused strategies. He holds a First-Class Honours degree in Banking and Finance from the University of London.
