
Keppel DC REIT poised for massive growth in the Big Data game
Amid the industry’s high barrier of entry.
According to a report by OSK-DMG, Keppel DC REIT is riding on data explosion or Big Data, the rising trend of outsourcing data centre needs and the high entry barrier in an industry it has built a deep presence in over the past 12 years.
On the back of a right of first refusals granted by its sponsor Keppel Telecommunications & Transportation on three properties in Singapore, Australia and The Netherlands, the REIT's portfolio could be set to expand even further. The firm's conservative capital structure - at 28%, it has one of the lowest gearings among Singapore-listed Reits - provides sufficient headroom for more acquisitions.
Additionally, data centres require hefty upfront costs and substantial technical knowledge, and customers generally prefer to stick with experienced providers with proven track records. This being said, Keppel DC REIT could stay on top of the game for a while.
Based on the listing document, Keppel DC REIT will offer a forecast distribution yield of 6.8% in 2015 and 7.1% the following year.