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1 day ago, 09:20 AM
$DigiCore Reit USD(DCRU.SG)
Digital Core REIT: Deep-Value Play With Execution Risk
Digital Core REIT remains one of the more discounted pure-play data-centre REITs. Compared with NTT DC REIT and Keppel DC REIT, its valuation is attractive, but earnings momentum remains weaker.
Fundamentally, H1 2026 revenue fell 0.4% to US$88.6 million while NPI declined 5.7% to US$43.7 million. DPU remained stable at US$0.018. Occupancy was strong at 97.3%, although its 4.3-year WALE leaves greater lease-renewal risk than Keppel DC REIT.
Leverage at 39.2% remains manageable, with debt maturity averaging 3.3 years. However, higher interest costs and refinancing remain key risks.
Valuation is the biggest attraction. At around US$0.50 versus NAV of roughly US$0.78–0.79, Digital Core REIT trades at about a 36% discount to NAV and offers roughly a 7% yield. By comparison, Keppel DC REIT trades at a significant premium to NAV, while NTT DC REIT is closer to NAV.
Technically, the unit price remains range-bound. Verdict: ACCUMULATE IN TRANCHES. The December 2026 Linton Hall lease commencement could provide the catalyst for NPI and DPU recovery.
Not financial advice.
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