Keppel DC REIT : Wow ! Wow ! Wow
Congrats !! for those invested in Keppel DC REIT as share price shoot up to $2.13 as of closing on last Friday. It's about +21% increased vs price prior to asset acquisition and equity fund rising announcement on 16th Sep 2019. I am not so sure if the new acquisition will give a DPU boost by more than 21%, else why there is a sudden change in perception or valuation for such asset class REITs after the announcement.
Keppel DC Reit to raise $473.8m to partially fund data centre acquisitions <source:straitstimes.com>
F.O.M.O? T.I.N.A ? or The Sky's The Limit?
By looking at the pace and % of the price increases, I think there is some kind of "euphoria" for the stock at this moment. Same as previous case on Capital Commercial Reit, we will still need to stick to fundamental valuation for REITs as the growth and revenue are not like those "tech stocks" that it could be "exponential " to some extent.
May be "This Time Is Different! ", I'm not so sure as the gyration from the financial markets can be startling, remembered the wisdom quotes from famous economist John M. Keynes " The market can remain irrational longer than you can remain solvent."
|image credit to AZ quotes.com|
This is not a call to buy or sell, of course, if you think 3+% of yield is good enough to compensate your risk in buying REITs, you may proceed to invest by all mean and who knows D.C will be the next "tech " kind of growth stocks, but I am also reminded by the words from Warren Buffett that " Price Is What You Pay; Value Is What You Get "
All the best and happy investing.
Enjoy your beautiful but a little bit "hazy " Sunday :D