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Keppel DC Reit posts 4.3% rise in Q3 DPU to 1.93 S cents

KEPPEL DC Reit on Tuesday posted a third-quarter distribution per unit (DPU) of 1.93 Singapore cents, up 4.3 per cent from 1.85 cents in the same period a year earlier.

The higher distributable income was due mainly to higher contributions from the Singapore properties, lower tax expenses and higher netrealised gains on derivatives relating to the settlement of foreign currency forward contracts hedged.

Net property income in the three months ended Sept 30 fell 1.8 per cent to S$42.3 million from the same period a year earlier.

Gross revenue fell 2.5 per cent to S$46.4 million due to the absence of rental top-up income recognised. Gross rental income rose 3.7 per cent but was partially offset by lower overseas contributions due to the depreciation of the Aussie dollar, euro, British pound and Malaysian ringgit against the Singdollar.

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Portfolio occupancy as at Sept 30 was 93.6 per cent. The Reit's portfolio weighted average lease expiry was 7.7 years.

Net asset value per unit was S$1.09 as at Sept 30, up from S$1.07 as at Dec 31 last year.

Aggregate leverage stood at 28.9 per cent as at Sept 30, down from 30.8 per cent as at Dec 31 last year.

The Reit manager wrote in its outlook statement that the data centre market "remains strong, supported by ongoing digitalisation and cloud deployments", despite expectations of slower global growth.

It said: "Notwithstanding increased competition in the data centre industry, Keppel DC Reit, with its established track record and enlarged portfolio of assets, is well-positioned to benefit from the growth of the data centre market."

The Reit manager added that it will continue to seek opportunities and strengthen its presence across key data centre hubs globally.

An advanced distribution of 1.81 Singapore cents per unit for the period from July 1 to Sept 24 will be paid on Nov 27, in connection with the private placement launched on Sept 16.

Keppel DC Reit declares distributions on a half-yearly basis. The next distribution will be for the period from Sept 25 to Dec 31. Semi-annual distributions will resume thereafter.

Also on Sept 16, the Reit announced the proposed acquisitions of Keppel DC Singapore 4 and the data centre located at 18 Riverside Road Singapore at agreed values of S$384.9 million and S$200.2 million respectively.

The acquisitions are expected to be completed in the fourth quarter, and will grow the Reit's assets under management by 30.2 per cent to S$2.6 billion, comprising 17 data centres. That's not counting IC3 East DC, which is currently under development and expected to be completed in 2020.

Keppel DC Reit units fell three Singapore cents or 1.49 per cent to S$1.99 on Tuesday before the results were announced.