Keppel DC REIT posts 3Q21 net property income rose around 2 percent

A Singapore 10-dollar note Photo by Leslie Shaffer

Keppel DC REIT reported Monday its third quarter net property income increased 2.3 percent on-year to S$63.78 million, as leasing momentum continued in the quarter, with healthy renewal and expansion of leases with existing clients.

Gross revenue for the quarter ended 30 September rose 2.5 percent on-year to S$69.34 million, the REIT said.

Distributable income, which includes capital expenditure reserves, increased 6.3 percent on-year to S$43.05 million, supported by contributions from acquisitions and asset enhancement initiatives (AEI), the REIT said.

The distribution per unit (DPU) rose 4.5 percent on-year to 2.462 Singapore cents, up from 2.357 Singapore cents in the year-ago period, the REIT said.

Distributions are declared on a half-yearly basis, with the next distribution set for the 23 August to 31 December period after paying an advance distribution of 1.421 Singapore cents a unit for the 1 July to 22 August period in connection with a private placement, the REIT said.

Portfolio occupancy was strong at 98.1 percent, a record, as of end-September, Keppel DC REIT said.

Keppel DC REIT pointed to resilient demand ahead, with end-user spending on public cloud services expected to grow by 23.1 percent this year to US$332.3 billion, up from US$270 billion in 2020. Europe’s main markets of Frankfurt, London, Amsterdam, Paris and Dublin have seen strong demand for data centers, the REIT said.

“Cloud, technology and social media companies continue to drive near-record levels of demand for data centers globally,” the REIT said. “The manager will continue to capitalise on growth opportunities in the data center industry, and strengthen Keppel DC REIT’s global presence.”

The REIT cited its planned investment in M1’s NetCo bonds and preference shares as a DPU accretive investment ahead. Additionally, the REIT has made its first investment in a China-based data center, the Guangdong Data Centre, as well as adding the Eindhoven Campus located in the Netherlands.

For the January-to-September period, net property income increased 6.2 percent on-year to S$187.62 million, gross revenue rose 6.7 percent on-year to S$204.49 million and the DPU increased 9.7 percent on-year to 7.386 Singapore cents, the REIT said.