Keppel DC REIT (KDCREIT) AJBU has posted 6.3% higher y-o-y net property income for 1QFY2023 ended March, at $63.8 million.
Meanwhile, distribution per unit (DPU) for the quarter is 3.0% higher y-o-y at 2.541 cents, following 4.1% higher y-o-y distributable income of $46.3 million.
KDCREIT says in its April 18 business update that the higher distributable income and DPU were mainly due to an increase in gross revenue from the acquisitions of Guangdong Data Centre 2 and building shell of Guangdong Data Centre 3; as well as from completed asset enhancement initiatives (AEI), renewals and income escalations; and tax savings.
These were partially offset by net lower contributions from some of the Singapore colocation assets arising from higher facilities expenses including electricity costs, higher finance costs from the refinanced loans, as well as unhedged loans and the depreciation of foreign currencies against the Singapore dollar.
KDCREIT’s gross revenue rose 6.5% y-o-y to reach $70.4 million during 1QFY2023.
Portfolio occupancy stands at 98.5% as at March 31, unchanged from Dec 31, 2022; while portfolio weighted average lease expiry stands at 8.2 years, down slightly from 8.4 years at the end of the previous quarter.
See also: Keppel DC REIT sees 3.7% increase in DPU of 10.214 cents for FY2022
KDCREIT’s aggregate leverage, or gearing, is 36.8% as at March 31; up 40 basis points from Dec 31, 2022.
Some 73% of its debt is fixed, which means an increase in interest rates would only affect the remaining 27% in unhedged borrowings.
Debt denominated in euro makes up the bulk of KDCREIT’s debt, at 39.0%; while Singdollar debt comes a close second at 34.1% as at March 31.
See also: 'Buy' Singtel as Asean's data centre sector enters 'hyper-growth': RHB
A 100bps increase in interest rates would have a 2.2% impact to 1QFY2023’s DPU on a pro forma basis, says KDCREIT.
KDCREIT says data centre demand continues to be driven by long-term trends including adoption of cloud computing, digital transformation initiatives, artificial intelligence and machine learning.
The worldwide cloud market grew by US$47 billion in 2022, says KDCREIT. Hyperscalers continued to see growth in their cloud businesses, with US hyperscalers reporting 20% to 32% growth rates in 2022.
Key markets are facing power constraints, and ready-for-service timelines may be slowed by supply chain issues and community resistance, says KDCREIT.
Units in KDCREIT closed flat at $2.08 on April 18.
