- Digital Core REIT – Worst Performer
Despite a relatively high occupancy of 98% for all their freehold properties, Digital Core REIT is still the worst performer among all the US REITs.
Digital Core REIT has the lowest gearing among the US REITs and is in the so-called booming Data Centre business.
However, the DPU for FY2022 shows a different story as shown below:
The recent share price drop can be attributed to several factors such as:
- Lower DPU compared to forecast
- Possible Economic downturn
- Murky outlook in the Tech Sector given the recent mass layoffs
- Silicon Valley Bank bankruptcy: >60% of their tech startup customers are based in Silicon Valley!
Long story short, investors think that Digital Core REIT’s tenant customers are facing a confluence of issues and the growth story of Tech Boom has been in the yesteryear.
Although the current >9% FY2022 yield seems attractive for the REIT, investors should look at the macro trends and whether...
