With its low gearing of 31.5% as at the end of December 2024, Lock believes the REIT remains “well-positioned” to continue seeking inorganic growth. The REIT’s gearing fell by 820 basis points (bps) after its equity fund raising (EFR) exercise in 4Q2024 to buy KDC SGP 7 and KDC SGP 8. Its average cost of debt also slipped to 3.1% in 4QFY2024 while its interest coverage ratio (ICR) improved q-o-q to 5.3 times as at the end of the year.
Analysts are remaining mixed on Keppel DC REIT’s prospects with CGS International analyst Lock Mun Yee keeping her “add” call and PhillipCapital’s Darren Chan retaining his “neutral” rating. Lock kept her target price unchanged at $2.48 while Chan increased his estimate to $2.25 from $2.16.
In her Jan 24 report, Lock notes the REIT’s strong rental reversions of a positive 39% in FY2024 and expects the “robust momentum” to extend into FY2025 from renewals in Singapore. In the REIT's results call, Loh Hwee Long, CEO of the manager, said that the team remains "very optimistic" about the "current state of matters" in the city-state.
