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Keppel DC Reit DPU up 5.7% in Q4

KEPPEL DC Reit has posted a fourth-quarter distribution per unit (DPU) of 1.85 Singapore cents, up 5.7 per cent from 1.75 Singapore cents in the same period a year earlier.

The higher distributable income was due mainly to the acquisitions of Keppel DC Singapore 5 and Germany’s maincubes DC. This was partially offset by the absence of the one-off capital distribution in relation to Keppel DC Singapore 3, lower contributions from Gore Hill DC and Keppel DC Singapore 1, as well as higher finance costs and manager’s fees.

Gross revenue in the three months ended Dec 31 jumped 30.5 per cent to S$48 million.

Gross rental income was S$44.67 million, up 27.9 per cent from the same period a year earlier, lifted by the acquisitions of Keppel DC Singapore 5 and maincubes DC. These were partially offset by lower rental income received from Keppel DC Singapore 1 as well as lower overseas contributions arising from the depreciation of the British pound, the Australian dollar and the euro against the Singapore dollar.

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Portfolio occupancy as at Dec 31 was 93.1 per cent, with less than 5 per cent of the leases due for expiry per year until end-2020. Portfolio weighted average lease expiry (WALE) was 8.3 years.

Net asset value per unit (excluding the distributable income) was S$1.03 at the end of 2018, up from S$0.93 at the end of 2017.

For the full year ended Dec 31, 2018, DPU was 7.32 Singapore cents, up 5 per cent from an adjusted DPU of 6.97 Singapore cents (to exclude the one-off capital distribution of 0.15 cents per unit) in 2017.

Acquisitions boosted the full-year DPU, though this was partially offset by lower rental income from Gore Hill Data Centre in Sydney, Australia and Basis Bay Data Centre in Cyberjaya, Malaysia.

The real estate investment trust (Reit) manager wrote in its outlook statement: “In the data centre industry, BroadGroup expects factors that fuelled growth in 2018, including the rapid growth in data creation and storage needs, increasing digitalisation and cloud adoption, as well as the strong growth in co-location demand from hyperscale cloud players, to continue into 2019.

“Established data centre hubs are also expected to continue to grow in importance as they offer telecommunications reliability, power availability, and access to neighbouring markets.”

Asset enhancement works at Keppel DC Dublin 1 are expected to be completed by 2020. The Reit manager has also embarked on power upgrading and fit-out works at Keppel DC Dublin 2 to make way for future client expansion. 

Keppel DC Reit rose one Singapore cent or 0.7 per cent to close at S$1.44 on Tuesday before results were released.