On 2 February 2026, Keppel DC REIT (“KDC”) released their full year result for FY2025. KDC delivered a resilient financial performance in the final quarter of FY2025. Despite an enlarged unitholder base following recent equity fundraisings, the REIT achieved an increase in Distribution Per Unit (“DPU”). This underscores the highly accretive nature of recent acquisitions and strong organic rental reversions within the portfolio.
KDC also saw the portfolio underwent significant valuation uplifts, driven by the structural tailwinds of the digital economy and AI-led demand. This appreciation directly bolstered the Net Asset Value (“NAV”), reflecting the increased strategic value of data centre assets.
With a market price that remained relatively stable quarter-on-quarter, the rising NAV has resulted in a compression of the Price-to-Book (“P/B”) ratio. Despite the lower P/B multiple, do note that KDC continues to trade at a significant premium to book value.
Disclaimer: Not financial advice. This content is provided for general informational purposes only and does not constitute financial, investment, legal, or tax advice. The information presented is based on publicly available data and estimates that may be subject to change without notice. It does not take into account your individual financial situation, investment objectives, risk tolerance, or specific needs.
Website: Financial Statements And Related Announcement::Full Yearly Results
Photo source: https://www.keppeldatacentres.com/locations/asia-pacific/singapore/dc-1/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +6.9% | -3.5% |
| Rating | Favourable | Unfavourable |
The DPU metric will be assessed on a quarterly basis given the information available from the business updates.
For KDC, DPU disclosed are as follows:
- 4th Quarter of FY2025: SGD0.02711 per unit
- 3rd Quarter of FY2025: SGD0.02537 per unit
- 2nd Quarter of FY2025: SGD0.02630 per unit
- 1st Quarter of FY2025: SGD0.02503 per unit
DPU for the fourth quarter of FY2025 has increased by 6.9% to SGD0.02711 per unit from SGD0.02537 per unit for the previous quarter. The increase in DPU was mainly due to acquisitions and a stronger portfolio performance. The metric shifted towards Favourable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 95.8% | 95.8% |
| Rating | Favourable | Favourable |
The occupancy metric will be assessed on a quarterly basis given the information available from the business updates.
Occupancy rate as of 31 December 2025 remain unchanged at 95.8%. The metric remains Favourable.
Gearing Ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 35.3% | 29.8% |
| Rating | Favourable | Favourable |
The gearing ratio metric will be assessed on a quarterly basis given the information available from the business updates.
Gearing ratio as of 31 December 2025 has increased significantly to 35.3%. The increase was due to debt drawdowns for acquisition of Tokyo Data Centre 3 and payment for Keppel DC Singapore 7 and 8’s 10-year lease extension consideration. The metric remains Favourable as there is still a buffer from the regulatory limit.
Interest Coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 7.5x | 6.6x |
| Rating | Favourable | Favourable |
The interest coverage metric will be assessed on a quarterly basis given the information available from the business updates.
The interest coverage as of 31 December 2025 has increased to 7.5 times. This was due to higher EBITDA and lower finance costs. The metric remains Favourable as the interest coverage is higher than my preference of 3.0 times.
Debt Maturity Profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.3 years | 2.8 years |
| Rating | Favourable | Favourable |
The debt maturity profile metric will be assessed on a quarterly basis given the information available from the business updates.
Weighted average term to maturity of their debt as of 31 December 2025 has lengthened significantly to 3.3 years. This metric remains Favourable as there is still sufficient time to refinance their debts as they fall due. KDC has 29.1% of their debt due for renewal by end of FY2027.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.35 | 1.46 |
| Rating | Unfavourable | Unfavourable |
The price to book ratio metric will be assessed on a quarterly basis. Although the information on net asset value is only available from the business updates on a half yearly basis, the most recent share price is available on a daily basis.
The Price to Book (“P/B”) ratio has become cheaper at 1.35. This is computed using the closing share price of SGD2.30 per unit on 6 March 2026 and the net asset value of SGD1.71 per unit as of 31 December 2025. The metric is Unfavourable as investors are paying a significant premium, although this is a REIT with a strong sponsor.
As of 6 March 2026, the Market Capitalization is approximately SGD5,622 million.
Website: Yahoo Finance: Keppel DC REIT (AJBU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2026 | 2.28% | SGD 0.052 |
| 2025 | 2.59% | SGD 0.060 |
| 2024 | 5.64% | SGD 0.130 |
| 2023 | 4.44% | SGD 0.102 |
| 2022 | 3.72% | SGD 0.086 |
| 2021 | 4.84% | SGD 0.111 |
The distributions in the first half of the calendar year 2026 landed at SGD0.052 per unit, projecting an annualized yield of SGD0.104 per unit. This performance is in line with the calendar year 2025 levels of SGD0.103 per unit when including the advance distribution made in the previous calendar year.
With a closing share price of SGD2.30 per unit as of 6 March 2026, this translates to a dividend yield of 4.52%. For my benchmark, a general reasonable yield would be around 4.75%. KDC’s dividend yield is below my benchmark, and the dividend yield is Neutral.
Website: Reasonable Dividend Yield 2026Q1 – 4.75%
If using dividend yield of 4.75% as a benchmark, based on the dividend of SGD0.104 per unit there is potential for KDC to see its share price drop by another 4.8% to SGD2.19 per unit.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.30 | – |
| 4.75% | 2.19 | -4.8% |
| 5.75% | 1.81 | -21.4% |
Interest Rate Sensitivity
The Federal Reserve on 29 January 2026 has voted to hold interest rates as its chair, Jerome Powell, defended the importance of central bank independence. The Federal Reserve said it will keep its key lending rate between 3.50% to 3.75%, stating that economic activity in the US “has been expanding at a solid pace”.
Website: US Fed holds interest rates and defends independence
As KDC have debts that are exposed to floating rate, any change in interest rate will result in KDC experiencing changes to their cost of debt. Management has disclosed that a 25-bps change in interest rate would have a 0.6% impact to 4Q 2025’s DPU on a pro forma basis. With a DPU of SGD0.02711 per unit in the fourth quarter of FY2025, the DPU impact is approximately as below.
| Change in Interest Rates | Impact on DPU (SG cents) | Change as % of FY2025 third quarter DPU |
|---|---|---|
| 25 bps | 0.016 | 0.6% |
| 50 bps | 0.033 | 1.2% |
| 75 bps | 0.049 | 1.8% |
| 100 bps | 0.065 | 2.4% |
Key Things to Note
Tenant Profile
KDC have a high tenant concentration with the top 10 tenants contributing to 83.1% of their total gross rent and the top tenant accounting for 42.1% for the month of December 2025. This is risky as KDC is heavily reliant on their top tenants for income. The withdrawal of any tenant will have a significant impact on their DPU.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +6.9% | Favourable |
| Occupancy | 95.8% | Favourable |
| Gearing Ratio | 35.3% | Favourable |
| Interest Coverage | 7.5x | Favourable |
| Debt Maturity Profile | 3.3 years | Favourable |
| Price to Book Ratio | 1.35 | Unfavourable |
| Overall | Favourable |
Overall, KDC metrics shifted towards Favourable. For a final look at the overarching strategy, I recommend a quick reread of the summary and overall outlook provided in the opening paragraphs.
Background
Keppel DC REIT was listed on the Singapore Exchange on 12 December 2014 as the first pure-play data centre REIT in Asia.
Keppel DC REIT’s investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate and assets necessary to support the digital economy.
Keppel DC REIT’s investments comprise a mix of colocation, fully fitted and shell and core assets, as well as debt securities, thereby reinforcing the diversity and resiliency of its portfolio.
Keppel DC REIT is managed by Keppel DC REIT Management Pte. Ltd. (the Manager) and sponsored by Keppel, a global asset manager and operator with strong expertise in sustainability-related solutions spanning the areas of infrastructure, real estate and connectivity.
Previous Post
Website: Keppel DC REIT (SGX: AJBU): 2025 Third Quarter Business Update
One thought on “Keppel DC REIT (SGX: AJBU): FY2025 Full Year Result”
Comments are closed.