Digital Core Reit posts US$12.1m in Q1 distributable income, beats IPO forecast

PURE-play data centre real estate investment trust (Reit) Digital Core Reit on Thursday (Apr 21) posted US$12.1 million in first-quarter distributable income, beating its initial public offering (IPO) forecast of US$11.9 million by 1.9 per cent. 

Gross revenue was 0.1 per cent lower than its IPO forecast, at US$26.5 million, for the first-quarter period. 

Net property income (NPI) beat its IPO forecast by 6.9 per cent, at US$17.9 million, for the same period. 

Digital Core Reit’s manager noted in its first-quarter business update that its fifth-largest customer, occupying 2.7MW of capacity in Toronto, has filed for bankruptcy protection. 

While the customer, a privately held IT service provider, remains current on its rental obligations and has obtained US$95 million of debtor-in-possession financing, the Reit’s manager said that it expects to be able to backfill the capacity if the customer rejects its lease, given the tight market. It also does not expect this to impact distribution per unit (DPU). 

As at Mar 31, the Reit’s portfolio of 10 data centres had a value of US$1.46 billion, with a weighted average lease of expiry by an annualised rent of 5.5 years and 100 per cent occupancy based on net rentable square feet. The Reit’s aggregate leverage stood at 26 per cent. 

Units of Digital Core Reit closed at US$1.03, down 2.8 per cent or US$0.03 on Thursday before the business update was released.