The increasing digitalisation of the global economy means there is an explosion of data created. As a result, demand has surged for computing capacity and storage to store all the gazillions of bytes floating around. Investors’ interests in data centres, naturally, has followed. Keppel DC REIT (KDCREIT), which is the first REIT in Asia that specialises in owning this asset class, sits pat on this surge. Within the increasingly diverse and REIT universe listed in Singapore, it stands out for delivering the best returns to shareholders within the evaluation period and is has been named the overall sector winner.
When it was listed back in 2014, KDCREIT’s portfolio was worth $1 billion, with eight assets in six countries. Since then, the REIT has steadily expanded, adding assets in markets ranging from Ireland and Germany to Australia and Singapore.
As at Sept 30, Keppel DC REIT has a portfolio consisting of 18 assets across eight countries and valued at $2.9 billion. It has been paying increasingly higher distributions. In FY2015 ended Dec 31, 2015, KDCREIT announced an adjusted DPU of 6.51 cents. This increased steadily to 7.71 cents for FY2019 and for the nine months ended Sept 30, it has already declared a DPU of 6.732 cents.
In addition to higher distributions year by year, Keppel DC REIT has given its unitholders even better capital gains. At the start of this evaluation period in June 2017, its share price was $1.27. That number has doubled to $2.54 as of June, giving a CAGR of 26.1% in shareholders’ returns.
The four Mapletree REITs are popular stocks to own, as well as being regular winners at the Billion Dollar Club. This year, two of the Mapletree REITs continue with the winning streak. Mapletree Commercial Trust (MCT) has been named top for growth in profit after tax; Mapletree Industrial Trust (MINT) led the REITs in weighted return on equity.
MCT was listed on April 27, 2011, and while its number of properties did not grow as rapidly as other REITs, this REIT is recognised for its steady bottomline growth. In the financial year ended March 2015, MCT recorded a net profit of $172.5 million. This number rose to $264 million for the year ended March 2019, representing a CAGR of 15.2%.
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As at Sept 30, MCT’s portfolio consist of VivoCity, Singapore’s largest mall, located in the HarbourFront Precinct; Mapletree Business City, a large-scale integrated office and business park and retail complex with Grade A building specifications, located in the Alexandra Precinct; PSA Building, an established integrated development with a 40-storey office block and a three-storey retail centre known as the Alexandra Retail Centre; Mapletree Anson, a 19-storey premium office building located in Singapore’s CBD; and Bank of America Merrill Lynch HarbourFront, a premium office building located in the HarbourFront Precinct. This portfolio has a total net lettable area of some five million sq ft and is valued at $8.7 billion.
MINT, which has been recognised for leading in weighted return on equity among the REITs, is able to invest in a broader mix of assets, ranging from high-tech buildings, business park buildings, flatted factories, light industrial buildings, and more recently, data centres.
As at Sept 30, MINT’s total AUM was $6.6 billion, comprising 84 properties in Singapore and 27 properties in North America (including around a dozen data centres held through the joint venture with Mapletree Investments). In June, MINT announced the acquisition of the remaining 60% interest in these US data centres for US$210.9 million ($283.3 million) from Mapletree Investments. MINT is able to keep its ROE at around eight times during the evaluation period of three years, for a weighted ROE of 8.05 times.
