Keppel DC REIT has reported a distribution per unit (DPU) of 4.549 cents for the 1HFY2024 ended June 30, a 9.9% y-o-y decrease from 5.051 cents the same period a year before, but a 5% h-o-h increase from 4.332 cents in 2HFY2023.
The REIT recorded a distributable income of $80.9 million, a 11.4% y-o-y decrease from $91.3 million, but a 5.9% h-o-h increase from $76.4 million.
Gross revenue rose 11.9% y-o-y to $157.2 million in the first half 2024, compared to $140.5 million in the same period a year before, and the REIT recorded a 4.2% higher y-o-y net property income of $132.6 million compared to $127.4 million in the same period a year before.
The REIT attributes this y-o-y lower DPU to loss allowance for the Guangdong DCs, higher finance costs and depreciation of foreign currencies against the SGD. This was partially offset by increase in rents from strong positive reversions and escalations as well as higher variable rent arising from the DXC settlement sum received, they say.
DXC paid a settlement amount of $13.3 million by April 2024, as a “commercial and amicable resolution” to the payment dispute, which involved the partial default of payment related to the provision of colocation services of a data centre in Serangoon North.
Meanwhile, Keppel DC REIT says that its h-o-h performance which saw an increase in DPU is due to a positive reversion of more than 40% for a major contract renewal in Singapore as part of the Keppel leases.
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It says its higher gross revenue h-o-h is mainly due to healthy positive reversions and escalations across portfolio as well as higher variable rent arising from the settlement sum received relating to the dispute with DXC Guangdong DCs 1HFY2024 income net off via loss
allowance.
As at June 30, the REIT’s portfolio occupancy stood at 97.5% while its weighted average lease expiry (WALE) stood at 6.4 years by lettable area.
The REIT says that as at June, its aggregate leverage stood at 35.8% mainly due to repayment of about $58.5 million debt for Intellicentre Campus and other EUR-denominated debt to strengthen the balance sheet for growth.
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Post-acquisition of Tokyo Data Centre 1, aggregate leverage expected to be 39.2% with a lower average cost of debt of about 3.3% as at June 30 on a pro forma basis.
Unitholders will receive their distributions on Sept 23.
Keppel DC REIT says that the strong momentum of investments into data centres is expected to continue this year fuelled by institutional investments and strong underlying fundamentals.
“The reliance on data centre facilities and digital infrastructure for business, commerce and communication continues to grow on the back of demand to power new-age technologies such as generative artificial intelligence, streaming services, digital applications, Internet of Things and e-commerce platforms,” it notes in a release dated July 26.
Keppel DC REIT is well-positioned to capitalise on the robust growth of the data centre industry, says the REIT. “Overall, the operating performance of Keppel DC REIT’s portfolio is expected to remain strong, underpinned by high occupancy and positive reversions. Looking ahead, the manager remains focused on enhancing its portfolio through strategic acquisitions, portfolio optimisation and proactive asset management, ensuring sustainable value creation for its stakeholders,” it ends.
As at 8.01am, units in Keppel DC REIT are trading 2 cents lower or 1.036% down at $1.91.
