KEPPEL DC Reit posted a distribution per unit (DPU) of S$0.02501 for the third quarter ended Sep 30, up 0.4 per cent from S$0.02492 in the previous corresponding period.
Distributable income rose 1.9 per cent on the year to S$44.7 million, from S$43.9 million.
The higher distributions came amid increased rent from strong reversions, a partial settlement payout received in relation to a dispute with DXC technology services, as well as contributions from the Tokyo data centre which it acquired in July this year.
However, this was partially offset by loss allowances for the Guangdong data centres, higher finance costs and depreciation of foreign currencies against the Singapore dollar, said the manager of the real estate investment trust (Reit) in a business update on Friday (Oct 18).
Finance costs rose 1.4 per cent on the year to S$13 million from S$12.8 million.
Gross revenue for Q3 climbed 8.9 per cent to S$76.9 million, from S$70.7 million a year earlier. This was due to contributions from acquisitions, and “strong reversions and escalations” across the portfolio.
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The Reit manager also noted that positive reversions persisted in Q3, buoyed by a contract renewal in Singapore that saw a reversion of more than 40 per cent.
Net property income was slightly lower, falling 0.2 per cent to S$64.5 million.
The Reit’s aggregate leverage rose to 39.7 per cent as at end-September, up 390 basis points from three months earlier. The average cost of debt was 3.3 per cent.
The manager noted that it has a “favourable” debt profile as at Sep 30. In Q3, the Reit secured seven-year loan facilities, totalling 25 billion yen (S$218.8 million), in connection with the acquisition of Tokyo Data Centre 1.
The Reit recorded a portfolio occupancy of 97.6 per cent, with portfolio weighted average lease by lettable area at 6.3 years.
This comes as the Reit increased its geographical diversification with new acquisitions and re-lease vacancies to enhance asset options, said its manager.
In its outlook, the manager is positive on the continued growth for data centres – buoyed by increasing digital transformation and the adoption of technologies, such as generative artificial intelligence.
It is also expecting vacancy in data centres to fall for the third consecutive year, as take-up in the Frankfurt, London, Amsterdam, Paris and Dublin markets is projected to reach 440 megawatts this year due to rising demand for capacity.
Units of Keppel DC Reit closed 0.9 per cent or S$0.02 lower at S$2.22 on Thursday.
