Nibbled Nvidia

 

I know I am late.

When it comes to building my US stock portfolio, I won’t sugar-coat it — the best time was 10 years ago. The era when Nvidia was still just a promising GPU maker for gamers and researchers. That window has passed. But as the saying goes, the second-best time is now. And today, amid fear, noise and scepticism, I chose to begin.

I nibbled Nvidia.

Not because it is a “safe” stock. Not because it dipped. But because I believe that Nvidia is not merely a company — it is the foundational infrastructure of the AI age.

Buying fear, not headlines

NVDA pulled back after news circulated that Google is using its own AI chip, raising concerns that hyperscalers might one day reduce dependency on Nvidia. The market, as it often does, responded with panic rather than perspective. Algorithms sold. Traders fled. Commentators questioned sustainability.

But what many fail to grasp is this:
The AI revolution is not a zero-sum game. Demand is expanding faster than any single company can supply. Even if giants like Google, Amazon and Microsoft build their own chips, the scale, software stack, and ecosystem Nvidia has built is decades ahead.

This is not a supplier relationship. This is an operating system for intelligence.

Jensen Huang, Nvidia’s visionary founder and CEO, once said:

“AI is the new electricity. Just as electricity transformed every major industry, AI will do the same.”

And Nvidia is building the power grid.

This is not a stock. This is infrastructure.

When I bought Nvidia, I wasn’t thinking about next quarter’s earnings. I was thinking about the next decade.

We are witnessing:

• AI factories replacing data centres

• Autonomous systems rewriting logistics and transport

• Neural networks reshaping medicine, design, manufacturing and defence

• Entire industries rebuilding around accelerated computing

Jensen Huang framed it simply:

“We are at the beginning of a new industrial revolution.”

History teaches us that those who own the picks and shovels in a gold rush often win more than the miners. Nvidia is not digging for gold. It is selling the machinery that makes the entire industry function.

My conviction: Nvidia will compound into a behemoth

I believe Nvidia will become a US$10 trillion company within the next three years.

That may sound audacious. But so did Apple becoming the first trillion-dollar company. So did Amazon dominating global commerce. So did Tesla redefining transport.

I believe Nvidia will cross US$500. Then US$1,000. Then it will split again — and compound further. Not through hype, but through relentless innovation, pricing power, and dominance in AI compute.

This is not speculation. This is a structural thesis.

Jensen Huang famously embodies this mindset, often reminding investors and engineers alike:

“The more you buy, the more you save.”

It sounds tongue-in-cheek, but in his world, it reflects the unparalleled performance and efficiency of Nvidia’s ecosystem — and the confidence that customers who commit once, keep coming back.

A symbolic nibble — a strategic beginning

My purchase today is not aggressive. It is deliberate. It is a symbolic first brick in building my US equity portfolio.

For years, my investments have been anchored closer to home. S-Reits and local banks for dividend. Stable. Sensible. Predictable. But the future of capital growth lies in participating in technological revolutions — not just observing them.

This nibble represents:

• A mindset shift

• A commitment to global exposure

• A belief in exponential technological acceleration

Yes, I am late. Yes, volatility will test my resolve. Yes, Nvidia will correct, retrace, scare and surge repeatedly.

But history does not reward perfect timing. It rewards those who own greatness and refuse to let go.

The journey begins here

This is not a trade. This is not momentum chasing. This is ownership.

Ownership in a company led by a man who wears the same leather jacket not as branding, but as a symbol of unwavering focus. Ownership in a vision where computing power becomes the engine of civilisation’s next phase.

As Jensen Huang puts it:

“We are going to change the world with AI – and we are just getting started.”

And so am I.

A small nibble today — but a long journey ahead.

Welcome to the beginning of my US stock portfolio.

Thanks for reading!

With love & peace,

Qiongster

Come with Nothing, Leave with Nothing

The modern pursuit of happiness is often defined by external achievements: collecting wealth, attaining status, and creating an identity based on what we possess. But profound spiritual teachings from around the world offer a radical truth: the path to freedom and fulfillment lies not in accumulation, but in radical acceptance and the mastery of letting go.

This wisdom is centered on one undeniable reality: we arrive with nothing, and we depart with nothing.

If we dedicate our lives to the mindset of constant acquisition and building up—collecting objects, status, and external validation—we set ourselves up for immense internal suffering. When the time comes for the physical body to fall away, the emotional self will face the terrifying reality of having lost absolutely everything.

The secret to a peaceful and fulfilling existence is to live according to these five timeless principles.

1. The Zero Sum Principle: Appreciate, But Never Attach

True freedom begins when we acknowledge the impermanence of all things.

This principle doesn't demand austerity; it asks for conscious living. We are encouraged to make use of and enjoy the beauties and possibilities that life offers. However, we must simultaneously hold the awareness that none of these things will be taken with us.

By embracing this knowing, consumption ceases to be a reactive need or an attempt to fill an inner void. Instead, every choice becomes a deliberate, conscious decision. We are free to engage fully with life without the inevitable heartbreak that comes from gripping onto what is ultimately transient.

2. The Inner Gaze: Find the Core of Who You Are

Before seeking change in the world, one must commit to finding the essence of the self.

The most vital task is to discover who or what you are. If your foundation of self-perception is based on external factors—the roles you play, the possessions you own, or the labels given to you—you will remain trapped in an illusion and bound to the cycle of suffering.

This journey also requires taking absolute responsibility. The belief that "everybody else is responsible for my misery" is a psychological dead end. Progress begins when you look inward and honestly acknowledge your part in your current situation, allowing you to reclaim your power to change it.

3. The Architecture of Skill: Invest with Continuity

Spiritual strength and a purposeful life are not gifts; they are skills built through daily investment.

Skill is cultivated not through sporadic bursts of enthusiasm, but through continuity, real effort, and real discipline. You cannot make up for six days of stagnation with one day of intense activity. Growth demands consistent behavioral patterns. When you pursue a challenging goal, you must learn to push past the immediate pain or resistance. The way to overcome limits is to hit them, learn to sit with the discomfort, and then step by step, move beyond them.

The greater your skill in navigating life—your internal discipline, self-awareness, and resilience—the more playable, enjoyable, and beautiful your existence becomes.

4. Embracing Totality: The World of Yin and Yang

The expectation that life should be continuously peaceful and positive is a fundamental misunderstanding of existence.

Reality is a duality—a world of Yin and Yang. Light coexists with dark, success with failure, joy with pain. If you seek to participate in the story of success, you will inevitably be part of the story of failure.

The ultimate wisdom is to see this duality as a complete whole. It is a profound gift to simply be able to experience the full spectrum of existence—the happiness, the heartbreaks, the tears, and the joy—without preferring one side or attempting to separate it from the other.

5. The Director’s View: Step Out of the Avatar

To avoid becoming trapped and defined by your own creation—the identity you’ve built—you must learn to shift your perspective.

Try to stop taking your current existence so seriously. Your personality, your roles, and your identity are just a picture. A helpful technique is to jump out of yourself and become the director of your own avatar. By viewing your life as a movie, you can observe times of struggle and turmoil without being completely consumed by them.

This perspective helps you to look beyond the surface, beyond the words and the superficial shape of things, where the true meaning lies. The only thing you need to do is go into yourself, contemplate, and find the answers there.

The ability to navigate life's inevitable changes and find consistent happiness is rooted in this essential commitment: Learn more about yourself.

Thanks for reading!

With love & peace,

Qiongster

Net Worth Update Nov 2025 | SGD 2.03m New Record High!

  

November 2025 marks a significant milestone on the journey to Financial Independence, Retire Early (FIRE), with my net worth soaring to a record high of SGD 2.03 million.

The surge in net worth has been primarily turbo-charged by strong performances in my key investment holdings, notably S-Reits and DBS, supplemented by consistent contributions to my CPF, successful capture of US option premiums, and persistent salary savings.

Net Worth Allocation: A foundation of security for growth

My current financial structure reflects a balanced strategy, prioritizing security while maintaining a strong commitment to growth.

Safe Heavens (61%)

CPF (34%): CPF constitutes the bulk of my wealth and foundation of my retirement savings. I intend to make cash top-ups to my Medisave account to enjoy tax reliefs after Medishield Life premiums are deducted in Dec 25.

Cash and war chest (18%): Liquid reserves strategically stashed in fixed deposits and Fullerton cash funds earning around 1% p.a. provide peace of mind and security for unexpected expenses or investment opportunities.

Bonds (9%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea PE Bonds ensures stability and provides steady source of passive income.

Retirement Savings and Protection (16%)

SRS (12%): A tax-deferred engine for supplementary retirement savings, diversified across $30k of SSB and local stocks such as Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar.

Insurance (4%): A Prudential whole life insurance plan and other savings plans will provide me with 6-digit lump sum payout after my retirement while offering continual protection for peace of mind.

Equities (23%)

Stocks and Reits (24%): A real estate-focused portfolio of stocks and Reits provides long-term dividend income and stability. This financial asset class is riskier, more volatile and sensitive to interest rates but offers me the opportunity to indirectly own diversified portfolios of industrial, retail and commercial properties locally, and around the world for consistent passive income. To enhance returns, I am actively selling cash-secured put options on high-growth US tech companies like AMZN and NVDA to collect premiums, a strategy aimed at either generating income or acquiring desired assets at a discount.

The Pursuit of FIRE

While net worth is the critical compass in the pursuit of FIRE—reflecting how close one is to the point where assets can sustainably fund all living expenses—the philosophy itself transcends mere accumulation.

The pursuit of FIRE is, fundamentally, about reclaiming control: control over our time, our choices, and the design of our lives. It creates the ultimate flexibility—the power to choose to work if we want to, to pursue passions full-time, or to take breaks without financial strain. This journey is a deliberate investment in security and a growing buffer against life's unpredictability.

Having successfully achieved the psychological milestone of SGD 2 million ahead of schedule, the focus now shifts decisively to tangible cash flow and long-term targets. I am secretly looking forward to achieving at least $36,000 in annual passive income by the end of this year, another $30,000 in "free" interests from CPF on 1 Jan 2026 and setting a more ambitious net worth goal of SGD 3 million by year 2028.

Financial independence is not an end; it is the power to design a life we do not need a vacation from, with the space to breathe, to live, and to thrive.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

My Journey to SGD 2M Net Worth and FIRE before 40

In December 2020, I crossed S$1 million in net worth. It was culmination of grinding for years.

Early last month, October 2025, less than 5 years later, I cracked S$2,000,000 in net worth.

Let me tell you the scariest part. Absolutely nothing has changed.

​I’m an average Singaporean. I hold a regular job, I didn't start with a silver spoon, and yes, I still eat cai png for lunch almost everyday.

While enjoying 'me' time, I still sit half naked in boxers on my couch watching YouTube, tune in to free streaming sites to watch laggy English Premier League soccer. I don’t wear a watch nor use the latest iPhone. No celebration nor parties.

​This milestone isn't just about the number. It's about proving that the system—the one we all navigate in this expensive, beautiful city—can work. It took years of disciplined work, calculated risk, and frankly, obsessing over my meagre spending.

Most people think achieving $2M means liberation. For me, it means affirmation. Affirmation that the extreme, counter-cultural lifestyle I adopted—the one everyone told me was "too much" or "not worth it" - is the accelerator pedal to true wealth and freedom of choices.

The journey from $1M to $2M is different from the journey to $1M. The first million is about sacrifice and grit. The second is about leverage and discipline.

​But here is the most important lesson I learned that will make this post different from all the others: The real secret to hitting $2M wasn't just working harder; it was making my money work exponentially harder than me.

​Here are the 5 non-negotiable principles I used to double my net worth in record time, and why they are contrarian to what most people believe.

​Principle 1: The CPF Supercharge—The Passive Money Machine

​This is the most controversial pillar, but it’s the bedrock of wealth creation in Singapore: CPF.

​Most people view their Central Provident Fund as a forced retirement savings account or, worse, "locked-up cash." I view it as a guaranteed, tax-free Guaranteed Investment Contract.

​Here's my controversial take: Maximize your CPF Special Account (SA) as early as possible.

• ​The Power of 4%: Your SA gives you a risk-free interest rate of up to 4% per annum. Where else can you get that? When I started work, I aggressively top-up my SA to the prevailing retirement sum limit every single year using the Retirement Sum Topping-Up Scheme (RSTU). Not only does this lock in the 4% compound interest, but it also gives me a dollar-for-dollar tax relief on my income. After hitting the full retirement sum  (FRS), your SA should be able to compound at a rate to catch up with the ever-increasing FRS to ensure that you could withdraw excess funds above FRS when you reach age 55.
• ​The Magic of Retirement: By treating my CPF as my fundamental retirement engine, I can free up my risk capital (the cash portion) to chase higher returns. It's the ultimate financial safety net, and I intentionally pushed the boundaries of its growth.

​Principle 2: The REITs Anchor—Becoming a Singaporean Landlord

​Once the CPF was humming along, I needed cash-flow investments. For me, that meant becoming a serial investor in Singapore REITs (Real Estate Investment Trusts).

​Why REITs over physical property (especially in this market)?

1. ​Low Barrier to Entry: I don't need $500K for a downpayment. I can buy a stake in a mall or a logistics hub for a few thousand dollars.
2. ​Liquidity: If I need cash, I can sell my REIT units in seconds on the SGX. Try selling a condo in a hurry.
3. ​Dividend Focus: REITs are legally required to distribute at least 90% of their taxable income, which translates to juicy, regular dividend payments.

​My strategy was simple: Buy Blue-Chip, Diversified REITs on Dips, and aggressively DRIP (Dividend Reinvestment Plan). Every cent of dividend income went straight back into buying more units. This created a powerful snowball effect, turning my investments into my biggest source of "new money."

Alternative strategy of investment would be to consistently invest in S&P 500 exchange traded funds or the likes of highly profitable US stocks including the likes of tech giants NVIDIA, Microsoft, Amazon, Alphabet, Meta and so on. As the US stock market only heads up over the long-term horizon, investing in it can make your money compound and grow. I regret that I did not invest heavily in US stocks during the pandemic as back them, my focus was on growing dividends for cashflow and passive income.

​Principle 3: The Unpopular Grind—Frugality as the Ultimate "Hack"

​This is where the real work and grind comes in, and it's the part nobody wants to hear: You can't invest what you don't save.

​I was frugal. Not "I only drink tap water" frugal, but intentionally anti-inflation frugal.

• ​Mindful Spending, Not Miserly Living: I still traveled, but I can use credit card miles and stayed in hostels or 3-star hotels instead of luxury hotels. I still ate out, but used hawker centres or food courts for 90% of my meals.
• ​The "Work More" Grind: Yes, I put in the hours at my main job to increase my income. I made sure I contributed to my company, grinded for pay increment every year, and strived to achieve promotion before my salary hits the ceiling cap.
• ​The 80% Rule: For the bulk of my wealth-building phase, I aimed to save and invest at least 80% of my take-home pay. This high savings rate is the ultimate financial cheat code. It's the only way to accelerate past years of potential lost returns.

This is the most unpopular move: for the past decades, I have capped my monthly expenses (food, utilities, transport, insurance) at below S$1,000.

You cannot beat inflation if you succumb to lifestyle inflation. By keeping my spending flat for 20 years, every single pay raise, bonus, and dividend I earned became pure, unadulterated investment fuel.

• The Value Equation: I am not cheap; I pay for value. A $5 hawker meal that fuels my day and gives me peace of mind is better value than a $300 fine dining experience that brings temporary vanity.

• Beating Inflation: My expenses are immune to inflation because my lifestyle is already at a "poverty level" that allows me to save an obscene percentage of my income. This high savings rate is the only way to accelerate from $1M to $2M.

Principle 4: Solitude is the Ultimate Financial Superpower

I am an anti-social introvert. I skip almost every gathering, wedding, party, and social obligation that costs money. I do not need friends. People think I'm anti-social and they are right. I think I live in my own world.

• Time Arbitrage: Every evening saved from "hanging out" is time invested in researching my portfolio, reading, strategizing my investments, or simply getting high-quality “me” time.

• Zero Obligation Tax: By avoiding social events, I skip the implicit tax of gifts, pricey dinners, clubbing, and keeping up appearances. That money goes directly into my investment account.

My solitude isn't a personality flaw; it's a massive cash injection into my net worth every month. You can't spend money if you’re happily at home in your boxers.

Principle 5: The Essentialist Career - Trading Passion for Fuel

Despite a strong interest in finance, I chose an Engineering/IT path in university. Why? Because my mother told me to choose a technical discipline in an essential service—one that is defensive and future-ready.

• Security Funds Risk: My stable, consistent income from an essential IT role (even during the COVID-19 Circuit Breaker) was the rock-solid foundation that allowed me to be a more aggressive, long-term investor.

• No Money, No Freedom: In this capitalist society, passion is a luxury. I chose to secure the money first to buy the freedom to pursue my passion later. My day job is the engine that consistently pumps cash into my portfolio.

The Ultimate Luxury: The Reclaming of Time

The real prize for reaching $2M isn't a fancy car or a bigger house; it's the freedom of choice.

I am still far from my final target of a $1M portfolio generating $50k a year, but the momentum is undeniable. This milestone unlocks the door to Financial Freedom—the ability to reclaim the time that would otherwise be spent trading life for a salary.

My journey proves that you don't need a high-risk startup or a massive inheritance. You need extreme discipline, strategic asset allocation (CPF + REITs), and the courage to ignore everyone who tells you to stop eating $3 food with tap water.

The greatest luxury is sleeping soundly knowing your money is working harder than you are.

The New Goal: From $2M to Financial Freedom

​Reaching $2M isn't the finish line; it’s the launchpad.

​The momentum I built is now powerful enough to declare true Financial Independence (FIRE), where the dividends and interest I earn already cover my annual expenses.

​If I can do this in one of the most expensive cities in the world, you absolutely can too. Stop thinking of the grind as the only way to earn money. Start building your own passive money machine using the tools Singapore gives you—the CPF and the SGX.

​This $2M net worth journey taught me this: The smartest money move you can make is putting your ego aside, utilizing every tax-advantaged tool available, and letting compound interest do the heavy lifting.

I look forward to the next milestone at $3M with $1M investment portfolio generating at least $60k in annual passive income, progressing towards FAT FIRE by end of 2028.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

Portfolio Update October 2025

Here is a portfolio update for Oct 2025.

My SGX Income Portfolio value increases to $442k from $431k due to the continued recovery of S-REITs from interest rate cut.

My US Growth Portfolio falls to US$20k from US$37k due to sale assignment of Lululemon from shorting covered call option.

My SRS Ultra Long-Term Portfolio value rises to $232k from $225k.

Portfolio Actions

1. Sold AMZN 251024 put option with $210 strike price at $3.15. Expired on 24 Oct.

2. Sold ADBE 251024 put option with $335 strike price at $8.30. Expired on 24 Oct.

3. Sold 100 shares of LULU at $165 from 251017 call option assignment.

4. Sold AMZN 251114 put option with $215 strike price at $10.20.

Portfolio Dividends

1. Received $303.00 of dividends from SSB on 1 Oct.

2. Received $147.50 of dividends from SSB on 1 Oct in SRS.

SGX Income Portfolio

Portfolio Value = $442k

US Growth Portfolio

Moomoo

Tiger Broker

Syfe Trade

Portfolio Value = US$20k

SRS Ultra Long-Term Portfolio

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

Net Worth Update Oct 2025 | SGD 2m Milestone Achieved!

 

In October 2025, my net worth has crossed the SGD 2,000,000 milestone, mainly turbocharged by the S-Reits and DBS in my investment portfolios, CPF contributions, US option premiums and salary savings.

Net Worth Breakdown:

Safe Heavens (60%)

CPF (34%): CPF still constitutes the bulk of my net worth and foundation of my retirement savings. It is a low hanging fruit tree that we should not ignore.

Cash and war chest (17%): Liquid reserves strategically stashed in fixed deposits and Fullerton cash funds earning around 1+% p.a. provide me some peace of mind and security for unexpected expenses or investment opportunities.

Bonds (9%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea PE Bonds ensures stability and provides steady source of passive income.

Retirement Savings (16%)

SRS (12%): A tax-deferred savings account serving as a supplementary source of retirement savings. My SRS funds are invested in $30k of SSB and 6 local stocks - Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar. I have subscribed to 1,000 Keppel DC Reit preferential offer shares at $2.24.

Insurance (4%): A Prudential whole life insurance plan and other savings plans will provide me with 6-digit lump sum payout after my retirement while offering continual protection for peace of mind. I have also upgraded my Medishield Life to integrated shield plan for private hospital coverage.

Equities (24%)

Stocks and Reits (24%): A real estate-focused portfolio of stocks and Reits provides long-term dividend income and stability. This financial asset class is riskier, more volatile and sensitive to interest rates but offers me the opportunity to indirectly own diversified portfolios of industrial, retail and commercial properties locally, and around the world for consistent passive income. I am currently more active in the US stock market by selling cash secured put options to collect premiums from tech companies that I want to own i.e. AMZN and ADBE.

The Pursuit of FIRE

Net worth is a snapshot of our financial health calculated by subtracting liabilities from assets. In the context of FIRE (Financial Independence, Retire Early), net worth becomes a critical compass. It reflects not only what we own and owe, but how close we are to reaching financial freedom.

By building passive income cashflows and increasing net worth, we move toward a point where our investments and savings can cover our living expenses without active work. This is often referred to as the “FI Number”—the amount of net worth needed to sustainably fund your lifestyle, typically based on the 4% Rule or similar frameworks.

But the pursuit of FIRE is not merely a race toward early retirement. At its heart, it is about reclaiming control: of our time, our choices, and the way we experience life. It’s about creating flexibility—to work if we want to, to take breaks when needed, or to explore passions full-time.

This journey is a deliberate investment in security. As our net worth grows, so does our buffer against life’s unpredictability. We gain confidence to navigate challenges without the looming pressure of financial instability. Financial independence empowers us to design a life we do not need a vacation from, with space to breathe, to live, and to thrive.

The recent resurgence of stock markets hitting new highs has accelerated my pace towards achieving the psychological milestone of SGD 2m, which I am lucky to have achieved before age 40. Moving forward, I am looking forward to at least $36k annual passive income by end of this year and growing my net worth to SGD 3m by year 2030.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

Will I Subscribe to Keppel DC Reit Preferential Offering at $2.24 in SRS account

 

On 22 September 2025, Keppel DC REIT, in a joint announcement with its sponsor Keppel Ltd, announced the acquisition of Tokyo Data Centre 3, a newly constructed, freehold hyperscale data centre in Inzai City, Greater Tokyo, Japan. 

The total purchase consideration for the facility is JPY 82.1 billion (approximately S$707.0 million), with Keppel DC REIT securing a dominant 98.47% effective interest. This transaction, which is expected to be completed by the end of 2025, represents a strategic move to deepen the REIT's presence in Japan, the largest data centre hub in the Asia Pacific (excluding China). 

The asset is highly desirable as it is fully contracted to a Fortune Global 500 hyperscaler client under a 15-year lease with built-in annual rent escalations, which significantly strengthens the portfolio's income stability and resilience. The acquisition is projected to be immediately Distribution Per Unit (DPU) accretive, with a pro forma DPU uplift of 2.8% for FY2024. 

To partially fund the deal, Keppel DC REIT has launched a fully underwritten, pro rata, non-renounceable preferential offering to raise approximately S$404.5 million, with the remaining financing to include JPY-denominated debt for a natural currency hedge.

Current shareholders of Keppel DC REIT (KDC REIT) are now faced with a common but important decision: whether to participate in the non-renounceable Preferential Offering (PO) at an issue price of S$2.24 per new unit on the basis of 80 units for every 1,000 units held.

This isn't just about snatching a small discount; it's about aligning our capital with the REIT's future strategy. Here's a breakdown of the key factors we need to consider.

1. The Rationale Behind the Offer

A preferential offering is typically a means to raise capital for growth, and KDC REIT's is no exception. The gross proceeds of approximately S$404.5 million are primarily earmarked for strategic initiatives:

• Acquisition of Tokyo Data Centre 3: A significant portion of the funds will partially finance the acquisition of a freehold, newly constructed hyperscale data centre in Inzai City, Greater Tokyo. This is a strategic move to deepen KDC REIT's presence in one of Asia Pacific's largest and most established data centre hubs (excluding China). The asset is fully leased to a global hyperscaler for 15 years with built-in annual rent escalations, offering long-term income stability.

• Asset Enhancement Initiatives (AEI): Funds will also be used for an AEI at Keppel DC Singapore 8.

• Land Lease Extension: Covering costs associated with the 30-year land lease extension for Keppel DC Singapore 1.

• Debt Repayment: A portion will be used to pay down existing debt, helping to maintain a healthy balance sheet.

The acquisition of the Tokyo Data Centre is expected to be yield-accretive, meaning it should increase the distribution per unit (DPU). Pro-forma analysis suggests a DPU increase of around 2.8% for FY2024 if the acquisition was completed then, which is a major positive for income-focused investors.

2. The Mechanics and Financial Impact

The core entitlement allows unitholders to subscribe for 80 new units for every 1,000 existing units held at the record date.

The Discount Factor

The issue price of S$2.24 is set at a discount to the prevailing market price (the unit price was S$2.36 on the day before the announcement). This discount is your immediate financial incentive for subscribing, as you acquire units below the cost of purchasing them on the open market at that time.

The Dilution Risk

If you do not subscribe to your full entitlement, your percentage ownership in KDC REIT will be diluted. The total number of units in issue will increase by about 8% (approximately 180.6 million new units). While the acquisition is DPU-accretive, non-participating unitholders will own a smaller slice of the enlarged DPU-accretive pie, slightly lessening the overall benefit for them.

Should You Apply for Excess Units?

The offering is non-renounceable, meaning you can't sell your rights. However, you can typically apply for excess units. Given that major shareholders have already committed to subscribing in full, and the offering is fully underwritten, the allocation of excess units to minority unitholders may be competitive. But if you have the capital and conviction, applying for excess units allows you to maximise your investment at the discounted price.

3. Verdict: What Should You Do?

The decision boils down to your long-term view on KDC REIT and its sector.

Scenario	Recommendation	Rationale
Long-Term Bullish Investor	Subscribe in Full	You maintain your ownership percentage and benefit from acquiring units at a discount for an accretive and strategically sound acquisition. This aligns your capital with the management's growth vision in the high-growth data centre sector.
Short-Term/Neutral Investor	Consider Subscription	The immediate discount and DPU accretion provide a strong case to subscribe to at least your entitlement. Selling later could potentially yield a profit depending on post-issue market dynamics.
Bearish/Unwilling to Add Capital	Do Not Subscribe	Understand that your stake will be diluted. The long-term DPU accretion from the new assets may still benefit you, but less so than for a participating unitholder.

Bottom Line: The acquisition of a fully-leased hyperscale data centre in Japan, with built-in rent escalations and expected DPU accretion, is a strong strategic move. For existing unitholders, subscribing to the Preferential Offering at S$2.24 allows you to participate in this growth at a favourable price and mitigate the dilution effect.

What will I do?

As I am vested in 11,000 shares of KDC in SRS account, I can only subscribe to the preferential offer shares using SRS funds, which I have deployed to money market funds. I am currently redeeming my market market funds and they should arrive in my SRS account next week I will be then able to subscribe to 1,000 shares (excess 120 shares on top of my entitlement of 880 shares) before the dateline of 13 Oct 2025, 5.30pm. The listing and trading of the new shares will commence on 22 Oct 2025, 9am.

Thanks for reading.

With love and peace, 

Qiongster

Disclaimer: This article is for informational purposes only and is not financial advice. Readers should conduct their own research and consult with a financial professional before making any investment decisions.