NTT DC Reit posts H1 DPU of US$0.0169, seeks growth in Tier 1 data centre markets

[SINGAPORE] NTT DC Real Estate Investment Trust (Reit) posted a distribution per unit (DPU) of US$0.0169 for the half-year ended Sep 30 – its first financial result since listing on the Singapore Exchange in July.

The H1 DPU was 3.3 per cent higher than the Reit’s forecast of US$0.0164 – calculated based on contributions from the six data centres in its portfolio.

Four of the Reit’s data centres are located in the US – three in California and one in Virginia – while one data centre is in Vienna, Austria, and another in Singapore.

The Reit’s gross revenue for the half-year stood at US$49.5 million, 1.8 per cent higher than the forecast. This was thanks to higher-than-expected contributions from co-location and power services, the Reit’s manager said in an earnings statement on Wednesday (Nov 12).

NTT DC Reit also recorded US$2.4 million in other operating income, as additional customisation works requested by tenants led to higher tenant fit-out revenue.

However, the fit-outs also led to property operating expenses being 1.8 per cent higher than forecast, at US$27 million.

Nevertheless, the Reit’s H1 net property income still beat the forecast by 1.7 per cent, at US$22.6 million. Distributable income was US$17.4 million, 3.3 per cent higher than expected.

NTT DC Reit’s portfolio occupancy by IT load – defined as contracted IT capacity divided by total design IT capacity – stood at 95.1 per cent.

There was 0.5 megawatt (MW) of net leased capacity secured at the California and Virginia data centres during the period, which brought the occupancy rate there to 95.7 per cent and 98.1 per cent, respectively, the Reit’s manager noted.

Meanwhile, the Singapore data centre achieved 0.3 MW of net leased capacity, bringing its occupancy to 93.4 per cent.

The Reit portfolio’s weighted average lease expiry stands at 4.4 years. As at end-September, the manager has renewed 79 contracts out of 206 contracts expiring before Mar 31, 2026.

NTT DC Reit said that it has a “prudent” capital structure, with aggregate leverage at 32.5 per cent and an interest coverage ratio of 4.1 times.

Looking ahead, the Reit seeks “accretive growth opportunities in Tier 1 data centre markets”, said the manager’s chief executive Yutaka Torigoe. The aim is to reduce tenant concentration, while diversifying the portfolio geographically.

Units of NTT DC Reit ended Wednesday flat at US$1.01, before the news.