Keppel DC Reit's Q3 DPU up 22.1%

KEPPEL Data Centre (DC) Reit on Tuesday posted a distribution per unit (DPU) of 2.357 Singapore cents for the third quarter, up 22.1 per cent from a year ago.

Distributable income jumped 47.6 per cent to S$40.48 million on the back of new acquisitions, it said in its operational update.

Meanwhile, net property income was up 47.6 per cent to S$62.37 million; gross revenue rose 46 per cent to S$67.67 million.

The Reit manager said that there was strong leasing momentum during the quarter, with new take-ups at co-location facilities in Singapore and Dublin. It also secured lease renewal at iSeek Data Centre in Brisbane, Australia.

As at Sept 30, 2020, it had portfolio occupancy of 96.7 per cent and weighted average lease expiry of 7.2 years by leased area.

Net asset value per unit stood at S$1.16, up from S$1.14 as at end-December.

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The Reit's average cost of debt was 1.6 per cent per annum, and its interest coverage ratio was at 12.7 times. Average leverage was 35.2 per cent as at Sept 30, up from 30.7 per cent as at end-December.

Some 68 per cent of its borrowings are hedged over the entire loan term, with the remaining unhedged borrowings in euro. The Reit is also hedging forecasted foreign-sourced distributions till H1 2022, with foreign currency forward contracts.

In its industry outlook, the manager noted that Covid-19 and changes in working practice have accelerated the shift to hosted and cloud-collaboration solutions. Annual spending on cloud services is expected to double in four years. The pandemic has also accelerated the move to keep data in-country because of stricter border controls and more stringent security and data sovereignty regulations, it said.

The manager said that it will continue to strengthen Keppel DC Reit's presence and position it to capitalise growth opportunities in the data centre industry.

Keppel DC Reit became a component stock of the Straits Times Index (STI) on Oct 19, with the exit of CapitaLand Commercial Trust ahead of its its merger with CapitaLand Mall Trust.

Units of Keppel DC Reit fell 7 Singapore cents to close at S$2.97 on Tuesday, before results were out.