10 Things to Know About Keppel DC REIT’s Latest Earnings

Keppel DC REIT (SGX: AJBU) is the first pure-play data centre REIT listed in Asia with a portfolio of 13 data centres located in main data centre hubs, including Singapore. The REIT’s sponsor is Keppel Telecom & Transport Ltd (SGX: K11).

Yesterday, Keppel DC REIT announced its financial results for the full year ended 31 December 2017 (FY2017). Here are 10 things investors should know from the earnings announcement:

1. Gross revenue for the year surged 40.3% to S$139.1 million, mainly due to new acquisitions, and appreciation of the Australian dollar and euro against the Singapore dollar.

2. Net property income went up from S$90.9 million in FY2016 to S$125.1 million in the latest period, an increase of 37.6%.

3. Distributable income to unitholders grew 34.8% to S$82.3 million. The distributable income rose mostly on the back of the REIT’s acquisitions, higher variable income from Keppel DC Singapore 1, and one-off capital distribution from the purchase of Keppel DC Singapore 3 that was completed in January 2017.

4. Distribution per unit increased from 6.14 cents last year to 7.12 cents in FY2017.

5. As at 31 December 2017, the net asset value per unit was S$0.97, a rise from FY2016’s figure of S$0.95.

6. In 2017, Keppel DC REIT’s borrowings went up mainly to fund the acquisition of Keppel DC Dublin 2, formerly known as B10 Data Centre. As a result, the aggregate leverage increased to 32.1%, as at 31 December 2017, from 28.3%, as at the end of 2016.

7. The weighted average debt maturity was 3.8 years, and the interest coverage ratio came in at 9.7 times.

8. The portfolio occupancy was at 92.6%, while the portfolio’s weighted average lease expiry by leased area was at a lengthy 9.1 years.

9. The REIT gave an update that its manager has started asset enhancement initiatives at Keppel DC Dublin 1. Furthermore, maincubes Data Centre, which is being developed in Germany, is expected to be handed over in the second quarter of FY2018. It will also start contributing to Keppel DC REIT’s earnings with a 15-year triple-net master lease agreement.

10. Looking ahead, the REIT said the following:

“Keppel DC REIT remains well-positioned to benefit from the growth of the data centre industry, with its global client base and the Manager’s established track record. The Manager will continue to seek opportunities to capture value and strengthen its presence across key data centre hubs.”

Keppel DC REIT’s units are now changing hands at S$1.47, translating to a price-to-book ratio of 1.5 and a distribution yield of 4.8%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.