KEPPEL DC Reit reported a 3.6 per cent decline in distribution per unit (DPU) for the third quarter on the back of higher finance costs and less favourable foreign exchange hedges.

According to its business update filed on Monday (Oct 16), DPU for the three months ended Sep 30 fell to S$0.02492 from S$0.02585 in the year-ago period. Distributable income was also down 6.5 per cent to S$43.9 million.

The distributions were weighed down by higher finance costs, which rose 56.9 per cent to S$12.8 million.

Gross revenue for the third quarter climbed slightly to S$70.7 million, up from S$70.3 million a year earlier, due to contribution from acquisitions as well as “overall positive income reversions and income escalations”.

Net property income was also slightly higher, rising 0.8 per cent to S$64.6 million.

For the nine-month period ended September 2023, Keppel DC Reit’s DPU stood at S$0.07543, down 1.2 per cent year on year. Distributable income for the nine months was down 2.1 per cent at S$135.2 million.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The Reit’s aggregate leverage rose to 37.2 per cent as at end-September, up 90 basis points from three months earlier. The manager noted that it has available debt headroom of S$182 million before hitting its internal cap of 40 per cent.

The average cost of debt was 3.2 per cent. The manager noted that there is no further refinancing for 2023, with the bulk of its debt expiring from 2026 and beyond.

Portfolio occupancy slipped to 98.3 per cent as at Sep 30, 2023, down from 98.5 per cent three months earlier. The manager said the Reit secured new and renewal contracts in Singapore, Australia, Ireland and the Netherlands, with overall positive reversions.

Units of Keppel DC Reit closed at S$2.01 on Monday, down 1 per cent or S$0.02, before the business update.