Distributable income is up 57.2% at S$127.1 million for the period

 

[SINGAPORE] Keppel DC Reit : AJBU +3.1% posted a 12.8 per cent increase in distribution per unit (DPU) to S$0.05133 for its first half of the financial year ended Jun 30, from S$0.04549 in the same year-ago period. 

 

This was attributed mainly to contributions from the acquisition of data centre buildings Keppel DC Singapore (KDC SGP) 7 and 8 last November, and Tokyo Data Centre 1 in July 2024, and contract renewals and escalations.  

 

The two hyperscale data centres KDC SGP 7 and 8 are located in Genting Lane in Singapore. The acquisition entitles the Reit to hold 99.49 per cent of the economic interest from these data centres. Tokyo Data Centre 1 was Keppel DC Reit&rsquo s first acquisition in Japan the total purchase consideration of 23.4 billion yen (S$195.3 million) was a 2.5 per cent discount to the property&rsquo s valuation of 24 billion yen. 

 

The distribution will be paid on Sep 15, after the record date on Aug 4.    

 

Separately, Loh Hwee Long, chief executive officer of the manager of the real estate investment trust (Reit), said on Friday (Jul 25) that the Reit will focus on establishing a strategic foothold in its existing markets of Japan and Europe, as well as South Korea where it has no presence yet. This will be achieved through the acquisition of hyper-scale data centres which can process large amounts of data. 

 

&ldquo Our focus is hyper-scale facilities, because that&rsquo s the segment in which we have very strong conviction will be in a sweet spot, given the developments in the sector in the years ahead,&rdquo said Loh, who was speaking at Keppel DC Reit&rsquo s financial results briefing.

 

The acquisitions have a target capitalisation rate of around 4 per cent in Japan, and around 6 per cent in Europe and South Korea, and the data centres are likely to have a power capacity of at least 20 megawatts, said Loh. 

 

Revenue was up 34.4 per cent at S$211.3 million for the half year, from S$157.2 million in H1 FY2024, said the manager of the Reit in a bourse filing on Friday. 

 

Distributable income rose 57.2 per cent to S$127.1 million from S$80.9 million, where the increase was partially offset by the divestment of Kelsterbach Data Centre in March 2025 for 50 million euros (S$75 million), and Intellicentre Campus, in addition to the absence of a one-off dispute settlement sum received in 2024.

 

Finance costs stood at S$24.5 million for H1, down 5.3 per cent year on year from S$25.9 million. Finance income rose to S$8 million for the period, up 45.7 per cent from S$5.5 million in H1 2024. 

 

Net property income rose by 37.8 per cent to S$182.8 million from S$132.6 million. 

 

As at Jun 30, aggregate leverage was at 30 per cent. Interest coverage ratio stood at 5.9 times.  

 

The Reit recorded a portfolio reversion of around 51 per cent in H1 2025. Average cost of debt fell to 3 per cent for the period, from lower floating rates compared with the same period a year prior. Total borrowings stood at S$1.6 billion, with 76 per cent hedged through interest rate swaps as at Jun 30. 

 

&lsquo Immediate&rsquo task to fill vacancies

Keppel DC Reit recorded a portfolio occupancy of 95.8 per cent, with portfolio weighted average lease by lettable area at 6.9 years.  

 

Loh said that the manager&rsquo s &ldquo immediate task&rdquo is to fill the vacancies in its assets. One of its tenants in KDC SGP 1 vacated in Q2, while another tenant in its Cardiff data centre will leave by mid-2026.

 

He said that the manager is on track to conclude a 30-year land lease extension for KDC SGP 1, which will take effect from the end of September 2025. 

 

&ldquo This extension will provide an opportune time for us to review our need for longer-term plans for the asset which is not a build-to-suit data centre,&rdquo said Loh. Such data centres are specifically designed for a tenant. 

 

He added that the vacant space in SGP 1 is attractive to potential tenants as it is a contiguous space. As it is not a build-to-suit data centre, there is also an opportunity for the manager to transform the space for other uses in the medium term.

 

On how quickly vacancies could be filled, he said it will take time to find tenants for the Singapore data centres, as the manager must ensure they match the available power capacity.

 

The manager will also &ldquo keep its options open&rdquo to alternative uses for the space in its Cardiff data centre.

 

While global macroeconomic conditions look uncertain amid shifting trade policies, the possibility of higher tariffs and persistent geopolitical tensions, industry fundamentals such as the rapid commercialisation of generative artificial intelligence is favourable for Keppel DC Reit, as the industry is poised for &ldquo robust growth&rdquo , said the manager of the Reit.   

The move will increase the total number of S-Reits in the index to eight

 

[SINGAPORE] Following the Straits Times Index&rsquo s (STI) June quarterly review, Keppel DC Reit : AJBU +2.28% will be entering the index, replacing Jardine Cycle & Carriage : C07 +0.46%, effective from Jun 23. This increases the total number of S-Reits in the index to eight.

 

The eight S-Reits in the STI will be: CapitaLand Ascendas Reit : A17U 0%, CapitaLand Integrated Commercial Trust : C38U +1.44%, Frasers Centrepoint Trust : J69U 0%, Frasers Logistics & Commercial Trust : BUOU +1.89%, Mapletree Industrial Trust : ME8U 0%, Mapletree Logistics Trust : M44U 0%, and Mapletree Pan Asia Commercial Trust : N2IU +0.85%.

 

Keppel DC Reit, with a market cap of S$4.9 billion, re-enters the STI after exiting in June 2023, and is expected to increase S-Reits&rsquo combined weight in the index to over 10 per cent.

 

The Reit, Asia&rsquo s first pure-play data centre Reit, listed in 2014 with eight data centres and S$1 billion in assets under management (AUM). Today, it owns 24 data centres across 10 countries, with an AUM of S$4.9 billion. Of this, 81.6 per cent is in Asia-Pacific (66.3 per cent in Singapore) and 18.4 per cent in Europe.

 

Keppel DC Reit&rsquo s Q1 2025 results showed a 59.4 per cent year-on-year increase in distributable income, with gross revenue and net property income (NPI) growing by 22.6 per cent and 24.1 per cent, respectively. Its distribution per unit rose by 14.2 per cent to 2.503 Singapore cents for the quarter. This was driven by acquisitions of Keppel DC Singapore 7 & 8, Tokyo Data Centre 1, and higher contributions from contract renewals and escalations in 2024. Portfolio rental reversion was 7 per cent, with no major renewals in 1Q 2025, and portfolio occupancy remained at 96.5 per cent as at Mar 31, 2025.

 

Loh Hwee Long, chief executive officer of Keppel DC Reit Management, noted at the annual general meeting that the Reit saw overall valuation gains in 2024, especially from its Singapore colocation assets. Most European assets also recorded local currency gains despite some softness in smaller data centres, reinforcing the strength of its diversified, value-focused portfolio.

 

The Reit has been actively acquiring assets. In 2024, it entered Japan as a new market with the acquisition of Tokyo Data Centre 1, and also completed the acquisition of two AI-ready hyperscale data centres in Singapore from its sponsor, Keppel, which marked its largest deal exceeding S$1 billion since listing. According to its annual report, the Reit&rsquo s sponsor, Keppel, plans to expand its data centre portfolio to a total of 1.2 gigawatt in the near term, which could provide a pipeline of assets for Keppel DC Reit to potentially acquire.

 

For its financial year 2024, the Reit recorded 15.5 per cent year-on-year decrease in total greenhouse gas emissions and has achieved the GRESB Green Star for a third consecutive year, with six of its assets in Singapore and Dublin maintaining green certifications.

 

In trading this year, Keppel DC Reit has ranked among the top 20 stocks by trading turnover and among the top five most actively traded S-Reits.

 

The STI reserve list, which consists of the five highest ranking non-constituents of the STI, will be (in alphabetical order): CapitaLand Ascott Trust : HMN +0.58%, ComfortDelGro : C52 0%, Keppel Reit : K71U 0%, NetLink NBN Trust : CJLU +0.58%, and Suntec Reit : T82U +0.89%.

 

The Straits Times Index will feature a heavier weightage of REITs - reflecting the growing popularity of this asset class.

 

Keppel DC REIT will replace Jardine Cycle & Carriage in the STI, following the latest quarterly review of Singapore' s benchmark market index.

 

Keppel DC REIT units closed at $2.19 on June 5, down 0.9% year to date, giving it a market value of $4.95 billion.

 

Jardine C& C, meanwhile, closed at $23.85 on June 5, down 16.61% year to date, giving it a market cap of $9.43 billion.

 

Changes are being made to the " reserve" list too, which is entirely made up of REITs and business trusts.

 

Netlink NBN Trust will replace Keppel DC REIT, while others in the reserve list are: CapitaLand Ascott Trust ComfortDelGro Keppel REIT and Suntec REIT.

 

The changes will take effect on June 23.

They may offer investors some shelter, given their weak correlation with US and global equities

 

[SINGAPORE] Sabana Industrial Reit : M1GU +1.43% (Sabana) kicked off the current earnings release season for S-Reits on Apr 15 with the release of its Q1 2025 financial results. This was followed by Keppel DC Reit : AJBU -0.98% and Keppel Pacific Oak US Reit : CMOU -1.65% both reporting Q1 2025 business updates on Apr 17.

 

Another 26 S-Reits have also confirmed that they will unveil financial results or business updates between Apr 22 and May 7 for their respective periods ended Mar 31 2025. Among them, three will report full-year financial results, three will report first-half or third-quarter financial results, and another 20 will provide quarterly business updates.

 

Sabana reported 26.5 per cent year-on-year growth in Q1 2025 income available for distribution per unit (DPU), led by a 22 per cent growth in net property income (NPI) and 4.6 per cent growth in gross revenue. Earnings uplift was due to higher occupancy at the majority of its multi-tenanted portfolio, particularly at Sabana@1TA4 and 33, 33A and 35 Penjuru Lane, which saw the highest increases.

 

Portfolio occupancy for Sabana improved from 85 per cent at the end of last year to 86.4 per cent as at Mar 31 2025. Specifically, the occupancy rate of 33, 33A and 35 Penjuru Lane rose to 86.3 per cent, an improvement from 73.7 per cent at the end of last year. Sabana achieved a high tenant retention rate of 99.7 per cent in Q1 2025, and all leases expiring in FY2025 have been activated for renewal and negotiations. Sabana continues to achieve double-digit rental reversion of 15.3 per cent for Q1 2025, following four consecutive years of positive double-digit rental reversion since FY2021.

 

Keppel DC Reit reported 14.2 per cent year-on-year growth in DPU, mainly due to contributions from acquisitions of Keppel DC Singapore 7 and 8 and Tokyo Data Centre 1, as well as higher contributions from contract renewals and escalations in 2024. Keppel DC Reit&rsquo s NPI and gross revenue grew 24.1 per cent and 22.6 per cent year on year, respectively.

 

Keppel DC Reit continues to see acquisitions as a parallel growth driver, with target markets including Japan, South Korea and Europe. Its assets under management have grown approximately five times to S$5 billion over the past 10 years since its listing. 

 

Keppel Pacific Oak US Reit posted a 19.3 per cent year-on-year decline in income available for distribution, mainly due to a 6.5 per cent decline in adjusted NPI, as a result of lower rental income from higher free rents due to timing differences in leases completed for the respective periods.

 

Keppel Pacific Oak US Reit has an occupancy rate of 89.1 per cent as at Mar 31, 2025, slightly lower than the 90 per cent recorded at the end of last year. However, its historical occupancy since 2019 remains higher than the US average and US gateway cities at 86 per cent and 83.4 per cent, respectively, as at Mar 31, 2025. Keppel Pacific Oak US Reit continues to remain focused on the fast-growing TAMI (Technology, Advertising, Media, and Information), medical and healthcare sectors across the key growth markets in the US. 

 

Low Huan Ping is appointed as director other resolutions are passed with more than 90% in favour

 

[SINGAPORE] Keppel DC Real Estate Investment Trust : AJBU -0.98%(Reit) lead independent director and chair of its nomination and remuneration committee Kenny Kwan failed to get re-elected at the annual general meeting (AGM) on Apr 15.

 

About 49.9 per cent of the votes cast endorsed his reappointment as a director, representing 632,589,622 units. The 50.1 per cent against the resolution represented 634,277,814 units, the Reit&rsquo s manager said in a bourse filing after the AGM. 

 

Kwan, who has an interest in 44,851 units of the Reit, will thus need to step down from his position.

 

Separately, Low Huan Ping, who holds 46,480 units, was appointed as a director at the AGM.

 

Other resolutions on ordinary business were also passed, with more than 95 per cent of unitholders&rsquo votes in favour of the moves. These were on receiving and adopting various reports and statements for the 2024 financial year, as well as reappointing the Reit&rsquo s auditor and authorising the manager to fix the auditor&rsquo s remuneration.

 

In addition, over 90 per cent of the voters passed a resolution on special business to authorise the manager &ldquo to issue units and to make or grant convertible instruments&rdquo .

 

The AGM was held before the release of Keppel DC Reit&rsquo s first-quarter results on Thursday (Apr 17). It posted a 14.2 per cent year-on-year increase in distribution per unit to S$0.02503. The counter closed at S$2.03 the same day, down S$0.02 or 1 per cent.