Keppel DC Reit Q3 DPU up 6.3%

KEPPEL DC Reit has posted a third-quarter distribution per unit (DPU) of 1.85 Singapore cents, up 6.3 per cent from 1.74 Singapore cents in the same period a year earlier.

The higher distributable income was due mainly to the higher rental top-ups recognised, though this was partially offset by lower ad hoc service revenue and power-related revenue.

For Keppel DC Singapore 5, the rental top-up was provided by the vendor for a period of one year from June 2018. For Keppel DC Dublin 2, the rental top-up was provided for one year from September 2017. The rental top-up income for Milan Data Centre is until December 31, 2018.

Gross revenue in the three months ended Sept 30 jumped 34 per cent to S$47.6 million.

Gross rental income was S$44.6 million, up 30.2 per cent from the same period a year earlier, owing to the acquisitions of Keppel DC Singapore 5, maincubes Data Centre in Offenbach am Main, Germany and Keppel DC Dublin 2.

Overseas contributions also rose from the appreciation of the euro against the Singdollar, though this was partially offset by lower rental income from Gore Hill Data Centre in Australia as well as the depreciation of the Australian dollar against Singdollar.

Net property income rose 33.4 per cent to S$43 million.

Portfolio occupancy as at Sept 30 was 93.1 per cent with less than 5 per cent of the leases due for expiry per year until end-2020.

As at Sept 30, portfolio weighted average lease expiry was 8.5 years.

Net asset value per unit was S$1.02 as at Sept 30, up from S$0.97 as at Dec 31 last year.

Assets under management stood at S$1.95 billion, comprising 15 data centres in eight countries.

The Reit had an annualised distribution yield of 5.32 per cent based on the third-quarter closing price of S$1.37.

The Reit manager wrote in its outlook statement: "Demand for data centre space in key European and Asian hubs continues to be underpinned by demand from hyperscale cloud players, increasing digitalisation and cloud adoption, data centre outsourcing, and other drivers such as data sovereignty regulations.

"According to BroadGroup Consulting, many hyperscale cloud players are only about a third of the way through their planned data centre build-outs, signalling strong potential requirements for data centre space. Improved connectivity as well as the development and adoption of new technologies will continue to drive the growth of data creation and fuel demand for data storage requirements in key data centre hubs globally."

Keppel DC Reit's units rose one cent to close at S$1.34 before the results were announced after market close.

The Reit declares distributions on a half-yearly basis. No distribution was declared for the quarter ended Sept 30.

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