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UOB KAYHIAN |
UOB KAYHIAN |
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Keppel DC REIT (KDCREIT SP) Exploring Acquisitions In Japan And AEI For SGP1
Highlights • Japan’s data centre market is at an inflexion point. KDCREIT could benefit from cap rate compression if regulations are eased to facilitate acquisitions of data centres by life insurance and real estate funds. • The AEI for SGP1 to be AI-capable could commence in 2028. • We like KDCREIT as a pure play on data centres and the expansion in Singapore and Japan.
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NTT DC REIT (NTTDCR SP) Building Balanced Portfolio Through Accretive Acquisitions
Highlights • Management is exploring the feasibility of acquiring a hyperscale data centre in Frankfurt, Germany in 1H26, which will increase exposure to Tier 1 markets. • NTTDC could build a balanced portfolio by tapping on the sizeable sponsor pipeline for acquisitions in Europe and Asia. • NTTDCR could recalibrate the formulae for calculating base fees and performance fees to better align with unitholders’ interest.
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LIM & TAN |
LIM & TAN |
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Keppel Infrastructure Trust / KIT ($0.46, up 0.5 cents) released an Investor Presentation on 23 September 2025 and we highlight the following: KIT is positioned as the largest SGX-listed Infrastructure Business Trust, offering exposure to the resilient global infrastructure sector. The portfolio, valued at $8.7 billion in Assets Under Management (AUM) as of 30 June 2025, is resilient and diversified across over 10 mature economies, focusing on essential assets in investment-grade jurisdictions. The portfolio is segmented across Energy Transition (62%), Environmental Services (10%), and Distribution and Storage (28%). KIT’s market cap stands at S$2.8bln and currently trades at 25.6x forward PE and 1.7x PB, with a dividend yield of 7.0%. Consensus target price stands at S$0.48, representing 4.3% upside from current share price. Valuations are lofty and consensus upside is low. However, in view of a more dovish environment, we think the yield has room to compress, which will result in KIT’s price appreciating. As such, we recommend an accumulate on weakness on KIT.
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Keppel DC REIT ($2.36, unchanged) and Keppel Ltd. (Keppel) have indirectly entered into agreements with unrelated third-party vendors, to acquire a 100% interest in Tokyo Data Centre 3, a freehold, newly built hyperscale data centre located in Inzai City, Greater Tokyo for JPY 82.1 billion (approximately S$707.0 million). Keppel DC REIT’s market cap stands at S$5.3bln and currently trades at 1.5x P/B, with an annualized dividend yield of 4.4%. Consensus target price stands at S$2.51, representing 6.4% upside from current share price. The preferential offering of 80 new Units for every 1,000 existing Units held is done at an issue price of S$2.24/unit, a 5.2% discount to the prior day. The acquisition of the Tokyo data centre will deepen the REIT’s presence in the resilient Japan data centre hub, provide built-in annual rent escalations with a 15-years period, and is a DPU-accretive transaction. We recommend shareholders to subscribe for their preferential offering entitlement. |
| MAYBANK KIM ENG | DBS GROUP RESEARCH |
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Solarvest Holdings (SOLAR MK) Solarvest x Brookfield
Landmark partnership with Brookfield Solarvest has signed a Joint Investment Framework Agreement with Brookfield CTF Asia Holdings (Brookfield), a subsidiary of Brookfield Asset Management. Under the agreement, Solarvest and Brookfield will jointly develop, construct, and operate at least 1.5GW of utility-scale solar PV and battery energy storage (BESS) projects over the next 3–5 years under Malaysia’s CRESS, LSS, MyBeST, and SELCO programs. To account for this, we raise our SOP-TP to MYR3.15. Maintain BUY. Solarvest is our top pick.
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DFI Retail Group Holdings
Ready to eat at 7-Eleven Investment Thesis: Streamlined business portfolio well positioned to weather an increasingly uncertain macroeconomic climate. DFI has streamlined its operations by divesting low-margin, low-strategic value businesses and exiting associate stakes with limited control, including those in Yonghui and Robinsons Retail. Post divestments, the portfolio appears more resilient and better balanced, anchored by food, health & beauty, and convenience – segments typically less sensitive to macroeconomic swings. These strategic changes should offset the more cyclical home furnishing and restaurants businesses, which are poised to outperform when conditions improve.
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