Keppel DC REIT (SGX: AJBU) share price ambushed!

As the US Federal Reserve raised interest rates for the first time in three years, S-REIT investors must be feeling the heat. I can almost smell the panic in the air for many retail unitholders as share prices across the local REIT universe tumbled in recent weeks. Heavyweights like Mapletree Logistics Trust (MLT) and CapitaLand Integrated Commercial Trust (CICT) were hit, and Keppel DC REIT (SGX: AJBU) share price was no exception. Should unitholders bolt for the exit, or be the Last Man Standing?

The last time I covered Keppel DC REIT was back in December 2024. That was a surreal period for investors as the S-REIT managed to strike an amicable settlement with DXC Technology, securing a cool $13.3 million payout to put the legal dispute to bed.

Keppel DC REIT share price crashed to Earth

Keppel DC REIT in turbulence

Keppel DC REIT share price in mystery slump

To top it off, Keppel DC REIT’s unit price caught a massive tailwind in late 2024 when global central banks began monetary easing and the Fed executed interest rate cuts. That macro shift—coupled with institutional appetite for AI-ready data infrastructure—helped propel Keppel DC REIT’s unit price back into the sweet spot of $2.00 bandwidth across 2025 and 2026.

Previously, I was tempted to fire a shot and invest in this counter. However, I stopped short after my past experience with Mapletree Logistics Trust (MLT). Much like MLT, Keppel DC REIT’s bottom line is heavily exposed to foreign exchange fluctuations. Roughly 37.2% of its asset base sits outside Singapore across Asia-Pacific and Europe. As the Singapore Dollar (SGD) continues its relentless march higher, Keppel DC REIT faces a persistent translation drag when converting foreign-denominated rental income back into SGD for distribution.

And then, of course, there is the Elephant in the Room: China. Just like MLT’s China headache, Keppel DC REIT has direct exposure to Mainland risk through its three Guangdong data centres, which defaulted on $9.1 million in rental payments back in late 2023. What is mind-boggling to me is how the Manager has allowed this Guangdong situation to continue festering till today.

During the Annual General Meeting (AGM), some unitholders had raised concerns about these Chinese assets and even suggested that the Sponsor (Keppel Ltd.) step in to intervene. Yet, the Manager maintained that it remains “cautiously optimistic” that the Guangdong facilities will see daylight soon.

Whether that conviction is grounded in reality or sheer wishful thinking remains to be seen. But here is what the cold, hard numbers reveal:

• Valuation meltdown: The combined carrying value of the Guangdong assets plummeted from $272 million in December 2024 down to $235 million in June 2026.
• Mounting Loss Allowances: Accumulated loss allowances tied to rental defaults at these Guangdong properties have ballooned to $31.5 million since 1HFY2023.

Back in 2024, I had thought that the Manager would resolve this issue by 2025. However, it seems that I was proven wrong as the malaise continues to be protracted till today. Just like MLT, the Manager of KDC remains steadfast in its China assets and is adamant to hold on to them tightly. However, the situation for Keppel DC REIT is far more complex as its parent company, Keppel, has a different plan for this S-REIT when it transferred its telco asset, M1, to the S-REIT in 2020. In this article, I will share my insights on Keppel DC REIT (SGX: AJBU) share price in the near future.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in Keppel DC REIT share currently. Whether Keppel DC REIT share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Keppel DC REIT (SGX: AJBU) share price stunned by M1 deal collapse

Apart from the fiasco of the Guangdong’s rental default, Keppel DC REIT (SGX: AJBU) share price also got weighed down by the fallout of [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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