SINGAPORE (July 21): The manager of Keppel DC REIT has declared a distribution per unit (DPU) of 4.375 cents for 1H20 ended June 30.
This is 13.6% higher than the DPU of 3.85 cents declared in 1H19.
Based on the closing price of $2.54 on June 30, the REIT’s 1H20 DPU implies that its annualised distribution yield was 3.44%.
Gross revenue for 1H20 rose 29.8% y-o-y to $124.0 million, while distributable income grew 38.0% y-o-y to $75.0 million.
The growth in gross revenue and distributable income was mainly attributable to the contributions by the acquisitions of Keppel DC Singapore 4 and DC1 in 4Q19. The addition of the Kelsterbach Data Centre in May 2020, also contributed to 1H20’s positive performance.
In 1H20, Keppel DC REIT says it acquired the remaining 999-year leasehold land interest at Keppel DC Dublin 1, and Kelsterbach Data Centre, which increased its assets under management to some $2.8 billion as at June 30.
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Enhancement works at Keppel DC Dublin 1 have resumed, and are expected to be completed in 2H20. Works to convert additional space at Keppel DC Dublin 2 into a data hall are expected to be fulfilled by 1H21.
As at June 30, the REIT’s portfolio occupancy rate stood at 96.1% with a weighted average lease expiry (WALE) of 7.4 years.
Keppel DC REIT has 2.6% of total net lettable area (NLA) up for renewal in 2H20.
The REIT’s manager says it has started engaging clients for early renewals, and brought down the total NLA due for expiry in 2021 to 6.2% as at June 30, from 10.7% as at end‐2019.
During the quarter, Keppel DC REIT says it has refinanced its short-term Euro loan to a four-year term loan at “favourable margins” in May, and the refinancing of the Australian dollar loan due in 3Q20, to 2024.
As at June 30, the REIT’s average cost of debt stood at 1.7% per annum with an interest coverage ratio of 12.8 times. Cash and cash equivalents stood at $205.2 million.
In its outlook statement, the manager says that the technology sector, as well as the data centre industry will remain “resilient” on the back of the Covid-19 pandemic.
It believes that prospects for the data centre market remain robust, underpinned by strong digital trends such as rapid cloud adoption, smart technologies, big‐data analytics, and 5G deployment.
“Keppel DC REIT remains well‐positioned to benefit from the growth of the data centre market, supported by its established track record and enlarged portfolio of assets,” it says in a Tuesday filing.
“The Manager will continue to leverage its competencies in investment, asset and capital management, and build on Keppel Group’s capabilities in project development and facilities management, to seek opportunities and strengthen its presence across key data centre hubs globally,” it adds.
Units in Keppel DC REIT closed 9 cents higher, or 3.4% up, at $2.75 on Tuesday, prior to the announcement.
