Keppel T&T was able to finally stabilize their data center to realize their investments by bundling them as a real estate investment trust. This is something rather new in Singapore so I decide to take a look at it.

Summary of Keppel DC REIT

  • WALE of 7.8 years based on NLA (compare to retail malls which are usually 3 years, logistics tenants 5-6 years, Australia offices 10-15 years, healthcare assets 10-15 years)
  • 93.5% occupancy
  • Mixture of co-location, double and triple net leases
  • Forecasted Yield of 6.8% and 7.1% for FY2015 and 2016 respectively
  • Most have build in rental escalation of 2% to 4% as well as variable rent as a basis of % of EBITDA (Gore Hill 3.5%, S25 and T25 3%, iSeek 2-4%,
  • Leverage 27.8% with an average duration of 4.4 years
  • Base fee: 0.5% of REIT’s deposited property, 3.5% …