COMMERCIAL PROPERTY | Staff Reporter, Singapore

Keppel DC REIT's NPI jumped 26% to $157.67m in 2018

Contributions from its new local and overseas assets drove up its earnings.

Keppel DC REIT’s net property income (NPI) grew 26% YoY to $157.67m in 2018 from $125.12m, an announcement revealed. Its distributable income to unitholders also rose 16.7% YoY in 2018 to $96.1m from $82.32m, whilst its distribution per unit (DPU) inched up 2.8% YoY from $0.0712 to $0.073.

For Q4, NPI climbed 30.1% YoY to $42.47m in from $32.65m during the same period in 2017, an announcement revealed. Gross revenue also jumped 30.5% YoY in Q4 to $48.04m from $36.83m in 2017, whilst distribution per unit (DPU) rose 5.7% YoY to $0.0185 in Q4 from $0.0175, its financial statement revealed.

Also read: Keppel DC REIT NPI jumped 33.4% to $43.04m in Q3

The strong performance was primarily attributed to contributions from its new assets data centre Keppel DC Singapore 5 and maincubes Data Centre in Offenbach am Main, Germany which was acquired in 2018, as well as Keppel DC Dublin 2. The firm added that higher contributions from Keppel DC Dublin 1 and Keppel DC Singapore 3 also drove up its earnings.

That being said, its higher distributable income for Q4 which rose 29% YoY to $26.13m from $20.25m was partially offset by the absence of the one-off capital distribution in relation to Keppel DC Singapore 3 and lower rental income from Gore Hill data centre in Australia, Keppel DC REIT explained.

As of 31 December 2018, the firm’s portfolio occupancy rate remained at 93.1% with portfolio weighted average lease expiry (WALE) remaining long at 8.3 years. “Less than 5% of the REIT’s leases are due for expiry per year in the next two years,” Keppel DC REIT added.

Also read: Keppel DC Singapore 5 could deliver an initial 7.8% yield in H2 2019

Apart from its acquisitions of Keppel DC Singapore 5 and maincubes Data Centre, the REIT also entered into an agreement to acquire the remaining 999-year leasehold land interest in Keppel DC Dublin 1 in 2018 which is expected to be completed in H1 2020.

"Asset enhancement works at Keppel DC Dublin 1 are expected to be completed by 2020, and management has also embarked on power upgrading and fit-out works at Keppel DC Dublin 2 to make way for future client expansion," the firm added.

Likewise, the REIT also announced that it had obtained a tax transparency treatment for its taxable income from Keppel DC Singapore 5 which is similar to what was granted for its three other data centres in Singapore. 

“Keppel DC REIT Management (the Manager) maintains a prudent capital management approach to mitigate the REIT’s exposure to fluctuations in interest rates and foreign currency exchange rates in this volatile macroeconomic environment,” the firm highlighted in a statement. “The Manager will continue to maintain its focused investment strategy to capture value and strengthen its presence across key data centre hubs.” 

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