Keppel DC Reit H2 DPU up 27.5% to 4.795 Singapore cents

KEPPEL Data Centre (DC) Reit on Tuesday reported a distribution per unit (DPU) of 4.795 Singapore cents for the second half of the fiscal year ended December 2020, 27.5 per cent higher than the DPU of 3.76 Singapore cents paid out in the year-ago period.

This lifted the Reit's DPU for FY 2020 to 9.17 Singapore cents, some 20.5 per cent higher than the distribution of 7.61 Singapore cents in FY 2019.

Distributable income for the period rose by 39.1 per cent year-on-year to S$81.9 million from S$58.9 million, pushing the Reit's distributable income for FY 2020 to S$156.9 million, an increase of 38.6 per cent from FY2019.

Keppel DC Reit said the growth in distributable income was supported by full-year contributions from Keppel Data Centre (DC) Singapore 4 and DC1, as well as its new acquisitions in Europe.

Gross revenue for H2 grew 42.6 per cent to S$141.6 million from S$99.3 million last year.

Meanwhile, property expenses for the period increased 36.7 per cent to S$11.7 million from S$8.5 million in the year-ago period.

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Consequently, net property income rose 43.1 per cent to S$129.9 million from S$90.8 million in the year-ago period.

The Reit manager said the company had capitalised on strong demand for data centre space by undertaking proactive asset management initiatives to improve portfolio occupancy.

As at end-December, Keppel DC Reit had a portfolio occupancy rate of 97.8 per cent with a weighted average lease expiry (WALE) of 6.8 years.

The Reit also has an aggregate leverage of 36.2 per cent, which gives it "comfortable debt headroom" for acquisition growth and asset enhancement initiatives.

In addition, Keppel DC Reit's assets under management as at end-December 2020 stood at approximately S$3.0 billion, an increase from S$2.6 billion as at end-2019.

The distributions for H2 will be paid out to unitholders on March 8.

In its outlook, the manager of Keppel DC Reit said it expects the global trend of digitalisation to continue post-pandemic as the digital economy continues to thrive amid the Covid-19 pandemic.

While the manager acknowledged that the resilience and rapid growth of the DC market have attracted more competition for assets and capital, the barriers of entry for the sector remain high, especially for quality co-location assets.

"The manager's track record, coupled with the ability to leverage the Keppel ecosystem in providing end-to-end solutions from project development and facilities management to client networking, have ensured that Keppel DC Reit is well-positioned to benefit from the growth of the data centre market," said the manager.

Units in Keppel DC Reit closed at S$2.89 on Tuesday prior to the results announcement, up 1.4 per cent or S$0.04.