Keppel DC REIT (AJBU.SI) saw its stock soar 2.01% during Tuesday's trading session, reflecting investor optimism following reports of strong rental reversions and recent strategic acquisitions in the data center sector.

The REIT has reported an impressive ~39% positive rental reversion for 2024, underscoring the robust demand for data centers in its portfolio. This significant increase in rental rates is expected to drive organic growth in the REIT's rental income, potentially leading to higher distributions for unit holders.

Adding to the positive sentiment, Keppel DC REIT recently completed a major acquisition valued at S$1.4 billion, involving two data centers. This strategic move, which was reported to be distribution per unit (DPU) accretive, has expanded the REIT's portfolio to 25 data centers with a total worth of approximately S$5 billion. The acquisition not only strengthens Keppel DC REIT's market position but also diversifies its asset base, potentially providing more stable and growing returns for investors.

The strong performance of Keppel DC REIT aligns with the broader trend in the REIT sector, where managers are employing various strategies to boost distributions in the face of challenges such as high interest rates and inflation. The combination of positive rental reversions and yield-accretive acquisitions appears to be paying off for Keppel DC REIT, as reflected in today's stock price surge.

Keppel DC Reit jumps 2.01% at 3:59 pm, Apr 16th.