Keppel DC REIT | Asia Pacific Risk Reward Update

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Keppel DC REIT | Asia Pacific Risk Reward Update

UpdateM

RiskRisk RewardReward– Keppel- DCKeppelREIT (KEPE.SI)DC REIT (KEPE.SI)

Data centre and growth story well in the price

PRICE TARGET S$2.30 EQUAL-WEIGHT THESIS

exposure to data centres:Base case, 50/50 weight of dividend yield and price to book. Our target dividend yield of ▪Positive

5.5% is 75bp tighter than our industry-wide forecast. Our target P/B on 1H25 trailing NAV is KDCREIT is one of Singapore's few pure-play

1.6x, at the five-year historical average. data centre REITs, a segment that enjoys

robust underlying demand from cloud and S$2.67

hyperscaler players, as well as structural

Consensus Price Target Distribution S$2.30 S$2.95 tailwinds from AI adoption.

MS PT delinquency in China: The rentalSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪Tenant

default of KDCREIT's master tenant in China

persists, and we expect continued tenant

delinquency.

appears fair: KDC enjoys theRISK REWARD CHART ▪Valuation

tightest trading dividend yields within our

coverage, and also trades well above NAV, SGD S$2.70S$2.70(+22.73%)S$2.70(+22.73%)(+22.73%)

even as acquisitions have slowed since 2019.

We thus think the market has fully priced in

2.4 inorganic growth, also giving appropriate

S$2.30S$2.30(+4.55%)S$2.30(+4.55%)(+4.55%) credit for KDCREIT's data centres. S$2.20S$2.20S$2.20

1.8 S$2.05S$2.05(-6.82%)S$2.05(-6.82%)(-6.82%) Consensus Rating Distribution

93% Overweight

1.2 7% Equal-weight

0% Underweight

0.6 MS Rating

Source: Refinitiv, Morgan Stanley Research

AUG '25 FEB '26 AUG '26 AUG '27 Risk Reward Themes

Key: Historical Stock Performance Current Stock Price Price Target Disruption: Positive

Source: Refinitiv, Morgan Stanley Research View descriptions of Risk Rewards Themes here