Keppel DC REIT 2Q DPU rises 6% to 1.93 cents on acquisitions
SINGAPORE (July 16): The manager of Keppel DC REIT has declared a DPU of 1.93 cents for 2Q19.
This is 6% higher than the DPU of 1.82 cents declared in 2Q18 and also brings 1H19 DPU to 3.85 cents, 6.4% higher than 1H18’s 3.62 cents.
Gross revenue for 2Q19 rose 13.2% to $47.5 million but property expenses rose a gentler 9% to $4.2 million, resulting in Net Property Income to rise 13.6% to $43.3 million.
Distributable income came in at $27.2 million for 2Q19, 18.1% higher than 2Q18’s $23.1 million while distributable income for 1H19 was also higher at $54.4 million, increasing by 23.7% from 1H18’s $43.9 million.
Keppel DC REIT Management says the improved performance was contributed mainly by the acquisitions of maincubes Data Centre in Offenbach am Main, Germany, and Keppel DC Singapore 5 in 2018.
As at June 30, portfolio occupancy stood at 93.2% with WALE of 7.8 years.
Keppel DC REIT’s average cost of debt remained at 1.7% per annum while aggregate leverage remained low at 31.9% as at the end of 2Q19. The REIT’s interest coverage ratio remained high at 12.9 times as at June 30.
The REIT’s weighted average debt tenor was 3.1 years, and the manager is in negotiations with its lenders to refinance the Singapore dollar-denominated loan due end-2019.
Keppel DC REIT Management says the retrofitting works at Keppel DC Singapore 3 are scheduled to be completed in 3Q19, and the power upgrading and fit-out works at Keppel DC Dublin 2 to make way for client expansion are on track for completion in 2H19.
When completed, the occupancy rate of Keppel DC Dublin 2 will increase to 100%. The asset enhancement works to improve energy efficiency at Keppel DC Dublin 1 are expected to be completed by 2020.
In its outlook statement, Keppel DC REIT Management says demand in the data centre industry remains strong, supported by the strong growth in data creation and storage requirements as enterprises and individuals continue to adopt cloud solutions.
The manager also says the development and adoption of new technologies such as 5G mobile networks, autonomous vehicles, virtual reality, the Internet of Things, will continue to contribute to the digitalisation wave and correspondingly, demand for data centres globally.
Units in Keppel DC REIT closed 3 cents higher at $1.71 on Tuesday.
