Keppel DC REIT's NPI up 32.1% to $114.22m in H1

This is attributed to the firm’s acquisitions of Keppel DC Singapore 4 and DC1.

Keppel DC REIT’s net property income (NPI) jumped 32.1% YoY to $114.22m in H1 from $86.49m in 2019, an announcement revealed. Revenue also grew 29.8% YoY to $123.95m from $95.49m.

Distributable income rose 38% YoY to $74.98m for H1 whilst distribution per unit (DPU) inched up 13.6% YoY over the same period to $0.04375 from $0.0385.

The strong performance was attributed to the firm’s acquisitions of Keppel DC Singapore 4 and DC1 in Q4 2019, as well as the addition of Kelsterbach Data Centre in May, increasing the REIT’s assets under management to approximately $2.8b.

As at 30 June 2020, the REIT’s portfolio occupancy rate remained healthy at 96.1% with a long weighted average lease expiry (WALE) of 7.4 years. The REIT has 2.6% of total net lettable area (NLA) up for renewal in H2.

The REIT’s manager has also started engaging clients for early renewals and brought down the total NLA due for expiry in 2021 from 10.7% as at end‐2019 to 6.2%.

Moreover, the REIT’s average cost of debt remained competitive at 1.7% per annum and its interest coverage ratio is at a healthy level of 12.8 times. Aggregate leverage remained low at 34.5%, providing the REIT with a comfortable debt headroom to pursue acquisition growth.

Meanwhile, the additional power capacity at Keppel DC Singapore 5 has been fully committed by an existing client in the facility. The asset enhancement works at Keppel DC Singapore 5 and DC1 also remained suspended.

The REIT’s manager notes that it will continue to monitor the situation amid manpower and supply chain constraints and delays in the completion of the asset enhancement works can be expected should construction workers remain suspended in the near‐term.

Looking ahead, the firm believes that the prospects for the data centre market remain robust, underpinned by strong digital trends such as rapid cloud adoption, smart technologies, big‐data analytics, and 5G deployment.

Keppel DC REIT said it remains well‐positioned to benefit from the growth of the data centre market, supported by its established track record and enlarged portfolio of assets.

The manager is said to continue to leverage its competencies and build on Keppel Group’s capabilities in project development and facilities management, to seek opportunities and strengthen its presence across key data centre hubs globally.