Keppel DC REIT 3Q19 net property income fell nearly 2 percent

Singapore one dollar bill

Keppel DC REIT reported Tuesday its third quarter net property income fell 1.8 percent on-year to S$42.27 million as on the impact of a stronger Singapore dollar on overseas contributions and on the absence of year-ago rental top-up income.

Gross revenue for the quarter ended 30 September declined 2.5 percent on-year to S$46.35 million, the REIT said in a filing to SGX.

Other income tumbled 95.1 percent on-year to S$145,000 on the absence of rental top-up income from the sellers of the KDC SGP 5, KDC DUB 2 and Milan DC properties, the REIT said; the rental top-up income was fully recognized by end-June, the filing said.

The foreign currency translation movement was a loss of S$6.14 million for the quarter, compared with a year-ago gain of S$2.63 million, Keppel DC REIT said.

The distribution per unit (DPU) for the quarter came in at 1.93 Singapore cents, up 4.3 percent from 1.85 Singapore cents in the year-ago quarter, the filing said.

Distributable income to unitholders rose 5.4 percent on-year to S$27.43 million in the quarter, the REIT said.

“The increases were mainly supported by higher contributions from the Singapore data centers, partially offset by overseas contribution due to currency depreciation against the Singapore dollar,” the filing said.

Portfolio occupancy was at 93.6 percent, the REIT said.

For the nine-month period, the REIT reported net property income rose 11.8 percent on-year to S$128.76 million on gross revenue of S$141.85 million, up 11.3 percent on-year. The DPU for the nine-month period was 5.78 Singapore cents, up 5.7 percent from 5.47 Singapore cents in the year-ago period, the filing said.

In its outlook, Keppel DC REIT was upbeat despite pointing to escalating trade tensions and policy uncertainty as weighing on risk sentiment in financial markets.

“The data center market remains strong, supported by ongoing digitalisation and cloud deployments. Improved connectivity as well as the development and adoption of new technologies will continue to drive the growth of data creation and fuel demand for data storage requirements in key data center hubs globally,” the REIT said.

“Notwithstanding increased competition in the data center industry, Keppel DC REIT, with its established track record and enlarged portfolio of assets, is well-positioned to benefit from the growth of the data center market,” it said.

The REIT’s portfolio had 15 data centers across Singapore, Malaysia, Australia, the U.K., the Netherlands, Ireland, Italy and Germany as of end-September, the filing said.

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