SINGAPORE - Data centre focused Keppel DC Reit reported third quarter net distributable income of $14.5 million, 2.2 per cent higher than its initial public offer forecast.
This was due to realisation of hedging gains and lower interest expenses due to the interest rate swaps it had entered into.
Net property income for the three months to Sept 30, however, was marginally lower than forecast, due to higher property tax expenses as well as foreign exchange losses from the depreciation of certain foreign currencies that were not foreseen.
Distribution per unit was 2.5 per cent higher at 1.64 cents.
As Sept 30, Keppel DC Reit was trading at 19 per cent above its net asset value per unit of 85.7 cents.
During the quarter, Keppel DC Reit successfully completed the sale and leaseback transaction with Macquarie Telecom for the shell and core building of Intellicentre 2 in Sydney. This addition will increase the Reit's portfolio to nine quality data centre properties with aggregate lettable area of some 597,900 square feet in key data centre hubs across Asia Pacific and Europe.
The 20-year triple-net lease that came on the back of the acquisition extended the Reit's portfolio weighted average lease expiry to 8.9 years.
The portfolio performance was underpinned by proactive leasing efforts as well as strong commitment from a well-diversified and credit-worthy tenant base.
Portfolio occupancy rate rose to 95.1 per cent from 94 per cent previously, with seven of its nine assets at full occupancy.
Despite a volatile operating environment, the industry fundamentals remain sound, said the Reit manager, noting that demand for data centres is set to continue.
"The rise of social media, Internet penetration as well as compliance and regulatory requirements are expected to fuel the growth of data storage needs."
The increasing outsourcing of data centre bodes well for Keppel DC Reit's co-location business as well.
Corporates are increasingly outsourcing their data centre requirements as businesses seek capital and operational efficiency, said the Reit manager.