Keppel DC REIT has posted gross revenue of $76.9 million for 3QFY2024 ended Sept 30, 4.2% higher q-o-q and 8.9% higher y-o-y.
Net property income of $64.5 million for the quarter is 4.6% higher q-o-q but 0.2% lower y-o-y, a result of property expenses more than doubling y-o-y to $12.5 million during the quarter.
Distributable income of $44.7 million is 6.3% higher q-o-q and 1.9% higher y-o-y. Distribution per unit of 2.501 cents for the quarter is 6.1% higher q-o-q and 0.4% higher y-o-y.
Compared to this time last year, the higher DPU is mainly due to rent increases from strong reversions and escalations, partial distribution of the DXC settlement sum received earlier in 1HFY2024 and contributions from Tokyo data centre (DC) 1, partially offset by loss allowances for the Guangdong DCs, higher finance costs and depreciation of foreign currencies against the Singapore dollar, says Keppel DC REIT in an Oct 18 announcement.
Singapore’s High Court ruled in January that former tenant DXC Technology Services will pay a settlement amount of $13.3 million as dispute resolution.
Keppel DC REIT declares distributions on a half-yearly basis.
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The REIT posted portfolio occupancy of 97.6% as at Sept 30, with weighted average lease expiry at 6.3 years.
Aggregate leverage grew 390 basis points q-o-q to 39.7% as at Sept 30, while average cost of debt fell 20bps to 3.3% in the latest quarter.
Weighted average debt expiry grew 0.3 years q-o-q to 3.4 years in 3QFY2024, with no debt expiring this year and 6.3% of total debt expiring in 2025. In 3QFY2024, Keppel DC REIT secured seven-year loan facilities totalling JPY25 billion ($219 million) in connection with the acquisition of Tokyo DC 1.
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The data centre sector is experiencing significant growth globally, driven by an increasing digital transformation and adoption of technologies, including generative AI, says Keppel DC REIT.
“Demand from cloud service providers (CSPs) continues to underpin colocation demand. In 1Q2024, colocation demand increased by 25.8% y-o-y, mainly driven by demand from CSPs, which increased by 34.2% over the same period,” says the manager. “The operational capacity of Asia Pacific’s data centre markets has moved towards the 12GW [gigawatt] mark with 1.3GW of new capacity added in 1H2024. The top six markets comprising China, Japan, India, Australia, Singapore and South Korea contribute 85% of the operational capacity within the region.”
Shares in Keppel DC REIT closed 2 cents lower, or 0.9% down, at $2.22 on Oct 17.
