Keppel DC REIT's NPI up 19.9% to $86.49m in H1

Contributions from its Germany and Singapore acquisitions drove up its earnings.

Keppel DC REIT’s net property income (NPI) climbed 19.9% YoY to $86.49m in H1 2019 from $72.16m in 2018, an announcement revealed. Revenue also grew 19.5% YoY from $79.94m to $95.49m.

For Q2 2019, NPI rose 13.6% YoY to $43.26m from $38.08m in 2018, whilst revenue jumped 13.2% YoY from $41.93m to $47.46m.

The strong performance was attributed to the firm’s acquisitions of maincubes Data Centre in Offenbach am Main, Germany and Keppel DC Singapore 5 in 2018. However, the increase was partially offset by lower variable income from the other Singapore properties, and overseas contributions decreased from the depreciation of AUD, EUR and GBP against the SGD.

Also read: Keppel DC REIT's NPI up 26.8% to $43.23m in Q1 2019

Distributable income rose 23.7% YoY to $54.35m and 18.1% YoY to $27.25m for H1 and Q2 2019, respectively. Distribution per unit (DPU) inched up 6.3% YoY in H1 2019 to $0.0385 from $0.0362, whilst in Q2, DPU rose 6% YoY from $0.0182 to $0.0193.

As at 30 June, the REIT’s portfolio weighted average lease expiry (WALE) was 7.8 years, and portfolio occupancy rate remained healthy at 93.2%. Less than 5% of the REIT’s leases are said to be due for expiry per annum in 2019 and 2020, and Keppel DC REIT Management is reportedly in discussions with these tenants to renew their leases.

Meanwhile, on the operational front, the retrofitting works at Keppel DC Singapore 3 are scheduled to be completed in Q3 2019, and the power upgrading and fit-out works at Keppel DC Dublin 2 to make way for client expansion are on track for completion in H2 2019. When completed, the occupancy rate of Keppel DC Dublin 2 will increase to 100%. The asset enhancement works to improve energy efficiency at Keppel DC Dublin 1 are expected to be completed by 2020.

Looking ahead, the firm noted that the development and adoption of new technologies, such as 5G mobile networks, autonomous vehicles, virtual reality, the Internet of Things, will continue to contribute to the digitalisation wave and, correspondingly, demand for data centres globally.

Also read: Can Keppel DC REIT stand its ground against multinational data centre players?

“Demand in the data centre industry remains strong, supported by the strong growth in data creation and storage requirements as enterprises and individuals continue to adopt cloud solutions. Demand for colocation data centres continues to be driven by strong take-up from hyperscale cloud players,” Keppel DC REIT said.

Keppel DC REIT Management will reportedly continue to seek opportunities to capture value and strengthen its presence across key data centre hubs in Asia Pacific (APAC) and Europe. As at 30 June, the REIT has a portfolio size of approximately $1.98b. The portfolio comprises 15 data centres in Singapore, Malaysia, Australia, the UK, the Netherlands, Ireland, Italy and Germany.