Keppel DC REIT, Asia’s first pure-play data centre real estate investment trust, has reported a significant 51% positive rental reversion for the first half of 2025. This growth was largely attributed to the renewal of colocation leases, particularly from SGP4, which contributed 11% to the rental income. The trust’s recent acquisitions, SGP7 and SGP8, also played a crucial role, accounting for about a quarter of the total net property income (NPI), according to a UOBKayHian report.
The REIT’s gross revenue surged by 34.4% to $154.5 million (S$211.3 million), whilst NPI increased by 37.8% to $133.8 million (S$182.8 million), bolstered by contributions from the newly acquired Tokyo Data Centre 1. Despite divestments in Sydney and Germany, the REIT maintained a robust performance, with a distributable income rise of 57.2% to $92.9 million (S$127.1 million).
Keppel DC REIT’s strategic focus on hyperscale data centres is evident as it seeks opportunities in Japan, South Korea, and Europe. The REIT aims to develop long-term relationships with hyperscale tenants, targeting data centres with a power capacity of 20-50MW. The tight vacancy in Singapore is expected to sustain positive rental reversion into 2026.
The REIT’s portfolio occupancy slightly dipped to 95.8% due to a vacancy at SGP1, but plans are underway to enhance its capabilities, including potential AI enhancements. Keppel DC REIT’s inclusion in the Straits Times Index from 23 June 2025 underscores its growing prominence in the market. The management maintains a “BUY” recommendation with a target price of $1.91 (S$2.69), citing stable debt costs and strategic growth initiatives.
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