Keppel DC REIT (SGX: AJBU) is a real estate investment trust (REIT) that owns data centres. Listed in December 2014, the REIT manages 15 data centres in Asia and Europe.
Keppel DC REIT recently announced its first quarter results for the financial year ending 31 December 2018 (1Q FY18). Here, I will look at nine things that investors should know about its latest financial performance.
1. In the latest quarter, gross revenue grew 21.5% year-on-year to S$41.9 million while net property income improved by 21.4% during the period to S$38.1 million.
2. Distribution per unit (DPU) rose 4.6% as compared to the same period last year to 1.82 cents.
3. Based on annualised DPU of 7.24 Singapore cents and closing price of S$1.35 as at 17 July 2018, the REIT has a trailing distribution yield of 5.4%.
4. As of 30 June 2018, the REIT’s gearing stood at 31.7%, which is a safe distance from the regulatory ceiling of 45%.
5. The REIT’s occupancy rate stood at 92% at the end of the quarter.
6. Weighted average expiry profile stood 8.8 years by net lettable area, with 31.5% of leases to expiry by 2022. The rest will expire from 2023 and beyond.
7. In terms of rental income breakdown, colocation, fully fitted, and shell & core accounted for 72.9%, 18.3% and 8.8% of rental income respectively.
8. Keppel DC REIT completed the acquisition of 99% interest in Keppel DC Singapore 5 on 12 June 2018 for S$295.1 million.
9. The REIT has provided the following outlook :
“According to its June 2018 update on Global Economic Prospects, the World Bank forecasts continued growth of the global economy in 2018 although policy uncertainty, geopolitical risks and mounting trade protectionism may dampen this growth outlook.
Demand for data centre space remains supported by both enterprises’ and consumers’ move towards digitalisation and cloud adoption. The trend of data centre outsourcing is expected to continue as large enterprises seek efficient deployment of quality high-redundancy data centre space. Improved connectivity as well as the development and adoption of new technologies will also continue to drive the growth of data creation. These drivers, as well as the tightening of data sovereignty regulations, are expected to fuel demand for data storage requirements in key data centre hubs globally.
Keppel DC REIT, with its established track record and enlarged portfolio of assets, is well-positioned to benefit from the growth of the data centre market. The Manager will continue to seek opportunities to capture value and strengthen its presence across key data centre hubs.”
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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 Lawrence Nga doesn’t own shares in any companies mentioned.