3 Huge Trends That Are Driving Growth At Keppel DC REIT

Keppel DC REIT (SGX: AJBU) was listed back in December 2014.

At its initial public offering (IPO), units of Keppel DC REIT were offered at S$0.93 apiece. The REIT closed at a unit price of S$1.42 on 26 January 2018, providing its early investors a total return of around 77% since its IPO (including dividends). As Foolish investors, we want to look beyond the stock price movement to understand the underlying business.

And for that, we can turn to Keppel DC REIT’s IPO prospectus. The document contains a wealth of information on the REIT’s business and market.

1. Data growth – click here

2. To the Cloud – click here

3. Regulatory and Compliance

BroadMedia Consulting (BMC), a group that was commissioned by Keppel DC REIT’s manager to prepare industry research, highlighted the growing burden of compliance and regulation in handling sensitive data:

“As a result of increasing compliance and regulatory requirements across a variety of industries including the banking, finance and healthcare industries, data storage and archiving requirements demand increasingly secure data centre facilities with reliable long-term access and on-demand retrieval capabilities.”

Regulations may differ between sectors. Some industries require a board range of data to be store for a long duration, while other might require data centres to have certain security features. BMC provided a few examples of the aforementioned regulations:

In short, as requirements increase, BMC believes that the demand for high-specification and professionally managed data centres such as Keppel DC REIT will increase.

Hang on for more on Keppel DC REIT next week.  

Meanwhile, we believe we've identified a REIT dividend dynamo whose financials are strong enough to qualify its dividend as "safe" - and have profiled this stock in a research report that's now available to download completely free of chargeSimply click here to claim your copy today!

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Chin Hui Leong doesn’t own shares in any companies mentioned.