Keppel DC Reit posts lower Q4 DPU despite rise in income

Keppel DC Reit has posted a lower distribution per unit (DPU) for the fourth quarter, despite clocking a better-than-expected showing.

DPU came in at 1.31 cents for the three months ended Dec 31 - 20.1 per cent lower than the 1.64 cents from the same period a year earlier. This also missed the forecast of 1.67 cents by 21.6 per cent.

But net property income for the quarter rose 14.2 per cent to $24.9 million, due to an increase in gross rental income and lower property operating expenses, while gross revenue grew 8.4 per cent to $26.8 million.

As a result, distributable income climbed 2 per cent to $14.8 million.

The lower DPU was largely due to an expanded base, given that the Reit had listed about 242 million new units on Nov 15 last year, in line with its acquisition of Keppel DC Singapore 3 (KDC SGP 3).

  • AT A GLANCE

  • NET PROPERTY INCOME: $24.9 million (+14.2%)

    REVENUE: $26.8 million (+8.4%)

    DISTRIBUTION PER UNIT: 1.31 cents (-20.1%)

There was also a period of 11/2 months for which there was no income contributed by KDC SGP 3 as the acquisition was completed later than expected, said the manager in a statement yesterday.

Net property income for the full year grew 4.7 per cent to $90.9 million, but gross revenue slipped 3.2 per cent to $99.1 million.

The Reit recorded losses per unit of 0.31 cent for the quarter, a steep reversal from the earnings per unit of 6.21 cents previously. Net asset value per unit stood at 95.4 cents as of Dec 31, up from 92.1 cents as of the same time a year earlier.

The preferential offering lowered the Reit's aggregate leverage to 28.3 per cent as of Dec 31, "allowing comfortable debt headroom and financial flexibility to pursue future growth opportunities", said the manager.

Weighted average debt maturity stood at 3.2 years as of Dec 31.

The average annualised cost of debt remained low at about 2.3 per cent per year, while interest coverage ratio was 9.4 times.

The Reit's portfolio occupancy rate rose from 92.7 per cent to 94.4 per cent, while the weighted average lease expiry was extended from 8.6 years to 9.6 years.

The manager said it continues to see growth potential in the data centre industry despite the uncertain global economic outlook, with demand for space remaining strong in the Asia-Pacific and Europe.

In Singapore, while the increase in data centre space is expected to exert near-term pressure on rental rates, the manager said it is confident of the market's long-term potential.

The recently completed acquisition of KDC SGP 3 will strengthen the Reit's foothold here, it added.

Keppel DC Reit units closed flat at $1.215 yesterday, before the results were released.

A version of this article appeared in the print edition of The Straits Times on January 24, 2017, with the headline 'Keppel DC Reit posts lower Q4 DPU despite rise in income'. Print Edition | Subscribe