Digital Core REIT, the owner of data centres, has been buying back its own units from the open market. The most recent transaction was on Dec 7 when it acquired 350,000 units at 60.04 US cents (81.64 cents) each. This brings the total number of units bought back under the current mandate to 2.86 million units or 0.2541% of the company.
Earlier on Dec 1, 2, 5 and 6, Digital Core REIT had acquired 1.1 million units at 61.92 US cents each, 670,000 units at 58.24 US cents each, 470,000 units at 60.56 US cents each and 270,000 units at 60.92 US cents each respectively.
On Dec 1, the manager of the REIT also announced it was going ahead with the 100% debt-funded acquisition of a 25% interest in a data centre in Frankfurt for US$140 million.
The acquisition is expected to close by the end of the year. The acquisition was first announced back on Sept 22. Back then, the REIT said it would either acquire a 25% stake in the Frankfurt data centre with a debt of US$140 million or pay for an 89.9% stake in the same Frankfurt data centre plus a 90% stake in a Dallas data centre at a total cost of US$681 million via equity.
At that time, the manager of Digital Core REIT said the decision would be based on whether it could raise capital through new equity. Digital Core REIT’s December 2021 IPO was offered at 88 US cents. It enjoyed a surge to as high as US$1.25 before declining due to growing concerns over financing costs as interest rates rose. Digital Core REIT closed at 62 US cents on Dec 6, substantially below its adjusted net asset value of 84 US cents as at Sept 30. It traded as low as 49.5 US cents on Nov 1.
In response to unitholders’ questions, the REIT manager explained that by using debt to fund, it could hedge a greater portion of its floating rate exposure, up from 50% hedged before the acquisition to 64% following the acquisition. “The manager has entered into a series of interest rate swaps with varying maturities. Every 100 basis point change in interest rates would have approximately a 3% impact on DPU,” the REIT manager says.
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In a business update on Oct 12, Digital Core REIT announced that distribution to unitholders for 9MFY2022 ended Sept 30 was US$34.4 million. This was slightly below its forecast at its IPO last November. Revenue was US$80.7 million, 1.6% above the forecast given at the time of the listing.
Wilmar chairman sees stake rise
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Kuok Khoon Hong, chairman and CEO of Wilmar International, saw his stake in the company rise.
On Dec 7, HPRY Holdings, the Kuok family investment vehicle, acquired about 612,000 shares on the open market at $4.0048 each. As Kuok holds a direct stake of 2.5 million shares and an indirect stake of nearly 814.9 million shares, his total stake in Wilmar comes up to nearly 817.4 million shares or 13.1% of the company.
Earlier on Dec 1, 2, 5 and 6 HPRY had also acquired on the open market 1.47 million shares at $4.10 each, 494,300 shares at $4.10, 700,000 shares again at $4.10 and 2.15 million shares at $4.097 each respectively. On Oct 28, Wilmar reported earnings of US$766.2 million for 3QFY2022 ended Sept 30, up 34.7% versus US$568.7 million recorded a year earlier. Revenue in the same period was up 10.2% y-o-y to US$18.9 billion, thanks to higher selling prices of its products.
