Keppel DC REIT’s Q3 2022 Business Update in Line; Maintain SGD 1.92 FVE

Keppel DC REIT, or KDC REIT, delivered a good set of operating performance data in its third-quarter 2022 business update, which is in line with our expectation. We maintain our fair value estimate at SGD 1.92 per unit and our narrow moat and stable moat trend ratings are unchanged. Following the market selloff over rising interest rate concerns, we think the opportunity to accumulate a quality data center REIT such as KDC REIT has emerged, as the trust is trading at an attractive 2023 distribution yield of 6% currently. We continue to like the trust as we think it is well positioned to benefit from the strong secular growth trends such as cloud computing, artificial intelligence, 5G, and other technological advancements driving the data center sector.