Keppel DC Reit

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#31
KDC REIT's preference offering was ~150% oversubscribed, with nearly as much excess applications as the valid acceptances. Not a surprise considering the share price is consistently ~10% above subscription price.

KDC REIT is trading >NAV and <4% dividend yield, an outlier among S-reits. What more, many of its assets have relatively short leases and benchmarking it to other industrial REITs (which also have short leased Sporean assets), that is even more impressive. The difference is because KDC REIT has been able to do its financial engineering magic - using "expensive equity" to buy assets that give relatively high return of capital + return on capital. That is a very lethal combination.

VBs used to warn about KDC REIT been expensive. But if we look back at its share price over the last few years compared to other deeply discounted-high dividend yield S-reit peers, it has probably outperformed. So, we could argue that "been expensive" is probably KDC REIT's real moat.

Virtual Dialogue with Securities Investors Association (Singapore) (SIAS) for the proposed acquisition of Keppel DC Singapore 7 (KDC SGP 7) and Keppel DC Singapore 8 (KDC SGP 8), and the proposed entry into new master lease agreements and new facility management agreements in relation to Keppel DC Singapore 1 (KDC SGP 1) and Keppel DC Singapore 2 (KDC SGP 2)

UL: How do you see distribution per unit (DPU) panning out in the near future with this acquisition, and in the long run?

AL: We will see immediate proforma accretion to DPU, which will stabilise at approximately 7%, assuming 100% interest in KDC SGP 7 and KDC SGP 8, land lease title of approximately 25.5 years and with tax transparency being obtained. We have delivered healthy reversions in the past two quarters and remain optimistic about delivering continued value for our Unitholders.

https://links.sgx.com/FileOpen/Transcrip...eID=827855
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#32
I used to be affected by the "short leases" on Spore industrial land but then I figured out that even without a 20-30year lease, the specs/fitting of the industrial property would probably be largely obsoleted after 20years. So even if one had bought a freehold industrial property, unless it is in a land scarce geography, else it wouldn't be too much of a difference with a leasehold industrial property.

MINUTES OF THE EXTRAORDINARY GENERAL MEETING (“EGM”) OF THE UNITHOLDERS OF KEPPEL DC REIT

HH, a unitholder, sought clarification about the 25-year land tenure for Keppel DC Singapore 7 and Keppel DC Singapore 8. CEO replied that the duration of the land tenure was consistent with other industrial land, which were generally granted for 20 to 30 years. Towards the end of the land tenure, an occupant will generally be able to apply to the authorities for a lease extension. CEO highlighted that similar arrangements were in place for other Singapore data centres within Keppel DC REIT’s portfolio, and that extensions have been obtained by the Manager in prior instances.

https://links.sgx.com/FileOpen/Keppel%20...eID=830771
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#33
This isn't looking very good as even Keppel Ltd's very own Christian Tan got a thumbs-down in the KIT AGM this year. Looking at Keppel DC REIT's past AGM results, the dissent has been building momentum since the AGM in 2022 (year end FY21) and finally the lead independent director has been voted down this year. So this is not a day1 issue and has remained "unresolved" for some time. What exactly is happening?

Some of Keppel DC REIT's institutional investors are not happy and I suppose such a re-election failure is one of the first for Temasek-linked companies. Keppel wants to be an asset manager and having satisfied institutional capital shareholders are critical to its reputation to keep attracting more LPs for its private funds.

Keppel DC Reit lead independent director Kenny Kwan fails to get re-elected at AGM

Low Huan Ping is appointed as director; other resolutions are passed with more than 90% in favour

https://www.businesstimes.com.sg/compani...lected-agm

Prof Mak's linkedin post shedding more light: https://www.linkedin.com/posts/yuen-teen...88480-awjG
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#34
Pretty informative to reduce my personal ignorance on the different type of DCs...

MINUTES OF THE ANNUAL GENERAL MEETING

Next, VT had a query about GV7 DC. Using it as a point of reference, he asked whether it was possible to switch a DC’s purpose from AI-training to AI-inference. CEO provided colour on the various purposes that a DC could be utilised for. He went through key distinguishing factors, including how DCs purposed for AI-inference and cloud uses would prioritise low latency, whereas DCs used for AI-training would prioritise cheap availability of utilities and land. In summary, the locality of a DC and its accompanying resources/attributes, including connectivity and latency, is relevant to its eventual purpose. CEO further shared that new releases of AI-deployment models such as Deepseek might underlie demand for AIinference DCs, which requires low latency to bridge end-users (likely based in urban centres). As Keppel DC REIT owns assets which are situated in highly-connected urban centres, CEO opined that these DCs should be able to continue servicing cloud and AIinference clients.

JT, a unitholder, sought the Manager’s comment regarding (i) the possibility of an AI-bubble; and (ii) Microsoft’s plans to pullback on DC leases in Europe and US. On these observations, CEO noted that these remarks were made in the context of oversupply in AI-training DCs. On a forward basis, technological developments suggest that AI-inference DCs may become more relevant and in demand, whereas pullbacks may be more applicable to AItraining DCs. CEO then reaffirmed that Keppel DC REIT does not have exposure to AI training DCs.

AGM MoM: https://links.sgx.com/FileOpen/Keppel%20...eID=845489
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