Listed on the Singapore Exchange since 2014, Keppel DC REIT (KDCR) is Asia’s first pure-play data centre REIT. Its current portfolio comprises 25 data centres across 10 countries in the Asia Pacific and Europe. As of 31 December 2024, KDCR manages over S$5 billion in assets, representing a five-fold increase since its listing, cementing its position as a leading data centre REIT in Singapore. KDCR’s strong asset management and active strategy piqued my interest in its recent performance and future outlook. To gain deeper insights, I attended its annual general meeting held in April 2025.
Here are 8 things I learned from the 2025 Keppel DC REIT AGM.
1. Gross revenue rose by 10.3% to S$310.3 million in FY2024, while gross rental income increased by S$28.7 million to S$305.7 million, up from S$277 million in FY2023. This growth was primarily driven by the expansion of existing contracts and major renewals across various assets, supported by strong rental reversions of 39%. The acquisition of Tokyo Data Centre 1 also contributed to the rise in revenue and gross rental income. Geographically, Singapore remains the largest contributor to gross revenue, followed by Ireland and China.
2. Distributable income grew by 3% to S$172.7 million, with distribution per unit (DPU) rising modestly to 9.451 cents per unit, compared to 9.383 cents in FY2023. This represents a yield of 4.24% based on Keppel DC REIT’s last closing price of S$2.02.
This performance reflects KDCR’s resilience and the positive outcomes of its active portfolio management. The growth in distributable income and DPU was bolstered by strong rental reversions and escalations, as well as a settlement sum received from the favourable resolution of litigation of Keppel DC Singapore 1. This is also supported by approximately S$1.2 billion in acquisitions, including Keppel DC Singapore 7 and 8, which are expected to uplift financial performance in FY2025.
3. The REIT’s portfolio occupancy dipped slightly from 98.3% in FY2023 to 97.2% as at 31 December 2024. The slight decrease was due to lower occupancy in certain assets, including Amsterdam DC, Gore Hill, KDC SGP 1, and KDC SGP 4. Despite this, KDCR maintained a healthy weighted average lease expiry (WALE) of 6.3 years as of 31 December 2024.
In 2024, the WALE by lettable area for new and renewal contracts was 5.5 years. These contracts accounted for 53.8% of Keppel DC REIT’s rental income as of end-December 2024. The REIT also maintains a well-diversified lease expiry profile, with approximately 51.3% of its occupied lettable area having more than five years remaining to expiry.
Management has expressed strong confidence in maintaining high occupancy levels, citing robust demand and limited supply in their operating markets. They have also highlighted their strong partnerships with hyperscalers, internet enterprises, and MNCs, which position the REIT to be a leading player in meeting future data centre needs.
4. CEO Loh Hwee Long emphasized that Keppel DC REIT is well-positioned for sustained growth, underpinned by its disciplined and proactive portfolio management strategy. In 2024, the REIT reignited its acquisition engine and intends to continue pursuing strategic, accretive deals. With one of the lowest aggregate leverage ratios among its peers and over S$770 million in debt headroom, KDCR is well-equipped to capitalise on future opportunities.
He also highlighted the REIT’s rigorous approach to asset assessments and market studies, which are conducted regularly as part of its annual review process. This thorough evaluation underscores KDCR’s strong commitment to active management and helps uncover value-creation opportunities—ranging from asset enhancement initiatives and power intensification to potential repositioning strategies—ensuring the portfolio remains competitive and future-ready.
5. KDCR continues to demonstrate agile financial management and a favourable debt profile. The REIT has adequately hedged forecast foreign distributions until December 2025 and is progressively hedging foreign-sourced distributions through 2026. It reported an average cost of debt of 3.1% for 4Q 2024, with an interest coverage ratio of 5.3 times, highlighting prudent debt management.
As at 31 December 2024, the weighted average debt tenure stood at 3.2 years. KDCR’s debt maturity profile is well-spread, indicating strong risk management. Total borrowings amount to approximately S$1.7 billion, with 66% of loans on fixed rates.
6. A unitholder was curious of the management’s growth strategy for KDCR moving forward. In response to a unitholder’s inquiry, management expressed optimism about future growth opportunities, particularly driven by the adoption of emerging technologies such as agentic AI. The REIT aims to leverage its geographically diversified portfolio across key digital hubs, its low-latency infrastructure, and its proven track record with hyperscalers to capture structural tailwinds. Management is exploring accretive acquisition opportunities, especially in APAC markets like Japan and South Korea, as well as in Europe.
7. When asked about KDCR’s geographical strategy, Chairman Christina Tan emphasized the REIT’s goal of building a resilient portfolio. This includes targeting data centres in power-constrained countries and markets with limited supply growth, enabling the REIT to benefit from positive rental reversions.
Loh elaborated that the REIT will continue to focus on hyperscalers while leveraging Keppel’s deep expertise in developing data centres. Currently, the portfolio is weighted 82% in the Asia-Pacific region and 18% in Europe, with Singapore making up two-thirds of the total. The REIT is actively targeting co-location markets with tight supply conditions and is managing leases strategically to extract rental reversions through negotiation. In contrast, its European assets are typically structured as triple-net leases with annual escalators, offering stable baseline income. Loh noted that significant value creation is being driven in co-location markets such as Singapore and Ireland, where KDCR has the opportunity to capture meaningful rental reversions.
8. In response to a unitholder’s question about managing smaller assets with limited power intensity, Loh explained that the REIT conducts power intensification studies to identify value-creation opportunities through asset enhancement initiatives. He emphasised that, despite improving power availability, KDCR is not rushing into acquisitions. Instead, the team remains focused on rigorous due diligence to ensure that any new acquisition aligns with the sponsor’s long-term vision and product strategy. KDCR will only pursue deals that are accretive to the portfolio and deliver strong returns for unitholders, citing the successful acquisitions in 2024 – Tokyo Data Centre 1, Keppel DC Singapore 7, and Keppel DC Singapore 8 – as prime examples.
The fifth perspective
Keppel DC REIT continues to demonstrate resilience and strategic agility, delivering strong returns through disciplined management and effective deal execution. While there was a slight dip in occupancy rates, the REIT’s proactive planning and well-structured deals have enabled it to capitalise on rental reversion opportunities and tap into growth areas such as AI and emerging technologies. Supported by Keppel’s strengths as a sponsor and its strong relationships with leading tech enterprises and AI ecosystems, KDCR is well-positioned to capture the next wave of data centre growth.
Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »
