THE manager of Keppel DC Reit on Friday (Jan 24) posted a distribution per unit (DPU) of S$0.04902 for the second half ended December, up 13.2 per cent from S$0.04332 in the previous corresponding period.
This brings total DPU for FY2024 to S$0.09451, up 0.7 per cent on the year.
Excluding the impact from the new units raised via a pro-rata preferential offering prior to the completion of the acquisition of Keppel DC Singapore 7 and Keppel DC Singapore 8, DPU for H2 2024 would have been S$0.04955, up 14.4 per cent from the previous corresponding period.
Total DPU would have increased by 1.3 per cent to S$0.09504.
The higher full-year DPU comes amid rent increase, distribution arising from the settlement sum related to the real estate investment trust’s (Reit) dispute with DXC Technology Services Singapore, as well as contributions from Tokyo Data Centre 1.
But it was partially offset by loss allowances for the Reit’s Guangdong data centres, higher finance costs in H1 2024, as well as the depreciation of foreign currencies against the Singapore dollar.
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Based on its closing price of S$2.18 on Dec 31, 2024, the real estate investment trust’s (Reit) distribution yield for FY2024 was 4.3 per cent.
The distribution for H2 will be paid on Mar 17, after the record date of Feb 5.
Distributable income rose 20.2 per cent to S$91.9 million for H2, from S$76.4 million in the same period the year before.
Revenue rose 8.8 per cent on the year to S$153.1 million, from S$140.7 million, mainly due to strong reversions and escalations across the Reit’s portfolio, as well as contributions from the Tokyo data centre.
But gains from the purchase of the Japan asset were partially offset by the sale of its Sydney data centre, Intellicentre Campus.
Net property income (NPI) was up 8.5 per cent at S$127.6 million for H2, from S$117.6 million, as property operating expenses rose 10 per cent on higher facility management fees from the Singapore assets.
For the full year, NPI was up 6.3 per cent at S$260.3 million, from S$245 million previously. Revenue rose 10.3 per cent on the year to S$310.3 million. Distributable income was up 3 per cent at S$172.7 million, from S$167.7 million previously.
Loh Hwee Long, chief executive of Keppel DC Reit Management, said: “Our strategic asset acquisitions and active portfolio management strategies have significantly contributed to Keppel DC Reit’s strong performance in FY2024.”
In April, the Reit divested its Sydney data centre for A$174 million (S$152.1 million), and some of the proceeds were reinvested into an Australian data centre note with an initial yield of about 7 per cent.
Loh believes the Reit is “well-positioned” to capture the rising demand for more advanced, artificial intelligence-ready data centres.
The recent sale of Basis Bay Data Centre in Malaysia is expected to be completed around Q3 2025.
The Reit’s portfolio by assets under management, which is worth some S$5 billion as at end-December 2024, stood at 80.7 per cent in Asia-Pacific and 19.3 per cent in Europe.
As at Dec 31, 2024, portfolio occupancy stood at 97.2 per cent. Meanwhile, the weighted average lease expiry by lettable area of its overall portfolio was 6.3 years.
In FY2024, the Reit recorded positive portfolio reversion of about 39 per cent.
Keppel DC Reit’s aggregate leverage as at Dec 31 stood at 31.5 per cent, down 820 basis points from Sep 30, 2024. This was mainly due to the purchase of the Singapore 7 and 8 data centres which was largely funded by equity fundraising.
Its average cost of debt was 3.1 per cent for Q4 2024 and 3.3 per cent for the year to date. Its weighted average debt tenor is 3.2 years. Some 66 per cent of the Reit’s borrowings are fixed through interest rate swaps.
As at Dec 31, 2024, Keppel DC Reit has an interest coverage ratio of 5.3 times.
Looking ahead, the Reit manager cautioned that vacancy rates for data centres will continue to decline across global markets due to strong demand for cloud adoption by both governments and businesses.
The global outlook also remains risky, it said, noting that there could be new spikes in commodity prices amid persistent geopolitical tensions, as well as trade tensions.
But the manager said it will continue to grow its portfolio of data centres and strengthen its presence across key international data centre hubs.
Units of Keppel DC Reit ended Thursday 0.5 per cent or S$0.01 higher at S$2.22.
