Digital Core REIT has reported a distributable income of US$12.1 million ($16.5 million) for the 1QFY2022 ended March, 1.9% higher than the US$11.9 million forecasted.
During the quarter, the REIT reported revenue of US$26.5 million, 0.1% lower than forecasted, while net property income (NPI) stood 6.9% higher than predicted at US$17.9 million.
Profit before tax stood 8.5% higher than estimated at US$13.5 million, while profit for the period stood 10.2% higher than forecasted at US$11.9 million.
Net profit attributable to unitholders came in 14.2% higher than forecasted at US$10.4 million.
As at March 31, Digital Core REIT reported a portfolio occupancy of 100% with a weighted average lease expiry (WALE) of 5.5 years based on annualised rent.
In its business update for the 1QFY2022, the REIT says it had established a minimum target of 50% fixed rate debt and entered into a US$175 million interest rate swap to mitigate interest rate risk.
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As at March 31, the REIT reported a total of 10 data centres under its portfolio with total assets worth US$1.5 billion. Total liabilities stood at US$362.2 million.
Its net asset value (NAV) per unit stood at 88 US cents as at March 31.
Its total leverage stood at 26.0%.
According to the REIT, its sponsor pipeline supports its path to a portfolio size of US$15 billion with US$0.5 billion to US$1 billion of near-term acquisitions identified.
In April 2022, Digital Core REIT’s fifth-largest customer, a privately held IT service provider (since identified as Sungard according to DBS Group Research) occupying 2.7 MW of capacity in Toronto, filed for bankruptcy protection. The customer remains current on its rental obligations to Digital Core REIT through the month of April, Digital Core REIT's manager says. The customer disclosed that it has obtained $95 million of DIP financing and “intends to meet its financial obligations, including paying suppliers in the normal course of business” going forward. Over the last twelve months, Digital Realty has leased 19 MW in Toronto, absorbing substantially all its existing available capacity.
If this customer rejects its lease, the manager says it expects to be able to back-fill this capacity, particularly given tight market conditions in Toronto. Sponsor Digital Realty has reached an agreement in principle to guarantee the cash flow to Digital Core REIT in the event of a near-term cash flow shortfall due to the customer bankruptcy. This customer event is not expected to impact DPU, the manager says.
Units in Digital Core REIT closed 3 US cents lower or 2.83% down at US$1.03 on April 21.
