Keppel DC Reit Q3 DPU up 4.5 per cent to S$0.02462

Keppel Data Centre (DC) real estate investment trust (Reit) on Monday posted a distribution per unit (DPU) of S$0.02462 for its third quarter ended Sep 30, 2021, up 4.5 per cent from the S$0.02357 it posted a year ago.

The Reit's manager attributed the increase in DPU to contributions from DPU accretive acquisitions and asset enhancement initiative (AEI) works that it has embarked on. These include the acquisition of the Eindhoven Campus in the Netherlands for 37.2 million euros (S$58.2 million) in Sep 2021, which has two data centre buildings.

Gross revenue was also up 2.5 per cent to S$69.3 million for the quarter, from S$67.7 million the previous year.

Net property income grew by 2.3 per cent on the year to S$63.8 million for the quarter, from S$62.4 million.

Distributable income further rose by 6.3 per cent to S$43.1 million, from S$40.5 million a year ago.

The Reit had previously announced a private placement on Aug 12 and an advanced distribution of S$0.01421 per unit was declared for the period from Jul 1, 2021 to Aug 22, 2021. The next distribution will be for the period Aug 23, 2021 to Dec 31, 2021 and semi-annual distributions will resume thereafter.

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In its operational updates, the Reit’s manager highlighted Keppel DC Reit’s record high portfolio occupancy of 98.1 per cent as at Sep 30, 2021. 

It also recorded a weighted average lease expiry (WALE) of 7 years by leased area. By rental income, WALE was 4.9 years as the Reit has a higher proportion of rental income from colocation assets, which typically have shorter lease periods. 

In its third quarter, the Reit also completed the divestment of its iseek Data Centre in Brisbane at A$34.5 million (S$34.8 million) in September, at 21.5 per cent above the initial public offering purchase price of A$28.4 million. 

In July, the Reit also commenced a new 20-year triple-net master lease with Macquarie Data Centres at the Inteillicentre Campus. 

Based on research company Gartner’s report, the Reit’s manager also expects end-user spending on public cloud services to grow by 23.1 per cent this year to S$332.3 billion, up from S$270 billion in 2020. 

It also noted that hyperscale operators almost tripled their capital expenditure in the first half of this year, in tandem with revenues growing by over 30 per cent per year.

Units of the Keppel DC Reit closed at S$2.40, up 0.8 per cent or S$0.02 on Monday before the results were released.