Digital Core Reit guides about 17% DPU growth for 2027; 9M distributable income dips 1.1%

[SINGAPORE] The manager of Digital Core Real Estate Investment Trust (Reit) expects its distribution per unit (DPU) to rise to between US$0.0415 and US$0.0425 for 2027.

This is about 17 per cent higher at the midpoint than its current DPU of US$0.036, noted its CEO John Stewart in an earnings call on Tuesday (Oct 27).

It is the first formal forward guidance the pure-play data centre Reit has given regarding its DPU.

Driving the increase in the DPU is the beginning of its Linton Hall lease, which will begin its 10-year lease starting in December, as well as the full year’s contribution from its manager asset swap with Digital Realty, said Stewart.

He noted that the Linton Hall facility – which has been vacant since a previous tenant left in June 2025 – is “on track and on budget” to begin operations soon.

In addition to the DPU guidance, the Reit manager also guided cash rental reversion to be in the positive mid-single digits in 2027.

Digital Core Reit also expects portfolio occupancy to be about 50 basis points over or under its current value. In addition, it forecasts the average interest rate to be between 3.25 per cent and 3.75 per cent.

The guidance comes off the back of a proposed major portfolio revamp that marked its entry into Singapore, and grew its presence in Japan alongside its divestments in three North American assets.

The Reit’s manager noted then that the sale of interests in its Los Angeles, Toronto and Northern Virginia facilities is expected to generate gross proceeds of some US$315.9 million.

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The partial-interest purchases of data centres in Singapore and Osaka is estimated to represent a total investment of around US$176 million, the manager said at the time.

Dip in 9M results due to lack of contribution

Distributable income of the Reit fell 1.1 per cent to US$34.8 million for the nine months ended Sep 30, from US$35.2 million in the year-ago period.

Revenue rose 1.6 per cent year on year to US$134.5 million from US$132.4 million, the manager said in a Tuesday (Oct 27) bourse filing.

Net property income (NPI) of the pure-play data centre Reit stood at US$64.8 million, down 4.3 per cent from US$67.7 million previously.

Stewart attributed the dip in NPI to the lack of contribution from the Linton Hall facility.

Linton Hall contributed to the NPI for six months in 2025 and zero in 2026, he added.

As at Sep 30, the Reit had 11 data centres and assets under management worth US$1.9 billion, with 65 per cent in North America, 24 per cent in Germany and 11 per cent in Japan.

Portfolio weighted average of leasing expiry (Wale) stood at four years, while in-service portfolio occupancy stood at 97 per cent.

Following the portfolio change – which Stewart expects to be completed in the fourth quarter – the Reit’s pro forma assets under management will dip slightly to US$1.8 billion, with 52 per cent of its assets in North America, 26 per cent in Germany, 18 per cent in Japan and 4 per cent in Singapore.

In addition, the number of data centres the Reit will have under its belt will fall to 10, while Wale will stand at five years with a 99 per cent occupancy.

Unitholders approved the deal in an extraordinary general meeting on Oct 22, with 99.92 per cent of the votes cast in favour.

Units of Digital Core Reit ended Tuesday flat at US$0.44, before the announcement.