[SINGAPORE] Keppel Data Centre Reit (Keppel DC Reit) recorded a higher distribution per unit (DPU) of S$0.02503 for the first quarter, up 14.2 per cent from S$0.02192 in the previous corresponding period, said its manager.
Distributable income (DI) for the period rose 59.4 per cent to S$61.8 million, from S$38.8 million in the year-ago period.
The rise in DPU and DI was driven by contributions from its acquisitions and a robust portfolio performance, said the manager on Thursday (Apr 17).
The manager added that the DI included capital expenditure reserves, which were set aside for computing the DPU based on eligible unitholders’ entitlements.
Q1 rental income from Guandong data centres (GDCs) was net off via loss allowances which impacted the quarter’s DPU by S$0.00249.
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Revenue for the quarter climbed 22.6 per cent to S$102.2 million from S$83.4 million in the first quarter of FY2024.
GDC’s rental income continued to be recognised under gross revenue and finance income, the manager said.
For Q1 of FY2025, net property income grew 24.1 per cent to S$88.1 million from S$71 million previously.
Higher net property income was primarily due to acquisitions of Keppel DC Singapore 7, Keppel DC Singapore 8 and Tokyo Data Centre 1, alongside higher contributions from contract renewals and escalations in 2024.
However, it was partially offset by the divestment of Intellicentre Campus and a one-off dispute settlement sum at Keppel DC Singapore 1, which was received in 2024.
Finance costs stood at S$12.5 million, down 4.1 per cent from S$13 million previously. This was due to interest rates decreasing and interest savings from loan repayments, but was partly offset by new loans in 2024 for acquisitions, said the manager.
Finance income rose 40.1 per cent to S$3.9 million from S$2.8 million in the year prior. Property expenses grew 13.9 per cent to S$14.1 million from S$12.4 million.
Aggregate leverage was 30.2 per cent as at Mar 31, 2025, lower by 130 basis points from Dec 31, 2024. The average cost of debt was 3.1 per cent. The interest coverage ratio for the trailing 12 months was at 5.8 times.
The manager noted that the Reit’s debt profile was “favourable”, stating that its sponsor subscription of S$85 million was completed in February 2025. This forms part of its equity fundraising of S$1.1 billion, launched in Q4 of 2024.
The Reit secured new loan facilities of around S$570 million that are available for drawdown, added the manager. This includes a S$150 million multicurrency green loan facility.
Portfolio occupancy stood at 96.5 per cent as at end March as portfolio reversion was at 7 per cent with no major contract renewals for the quarter.
Its portfolio weighted average lease expiry (Wale) was 7.1 years by lettable area. Wale by rental income was 4.4 years as a higher proportion of rental income was from colocation assets, which typically have shorter contractual periods, the manager noted.
With 78 unique clients in its portfolio as at March 2025, Internet enterprises contribute to the bulk of its rental income with a 63.1 per cent share.
This is followed by clients in IT services who contribute to 16.9 per cent of rental income and telco clients with 15.9 per cent.
As at March 2025, its assets under management (AUM) stood at S$4.9 billion, with the Asia Pacific region taking up the lion’s share of 81.6 per cent of its AUM and Singapore with 66.3 per cent. It has 24 data centres across 10 countries.
Outlook: AI trends to drive growth
Artificial intelligence (AI) trends are set to drive data centre demand globally, said the manager. Generative AI workloads are fuelling most growth in data centre capacity at a projected compound annual growth rate of 39 per cent until 2030.
Asia-Pacific data centre demand is set to accelerate in 2025 as utilisation rates are expected to improve to 88.8 per cent.
The rise of competing AI models like DeepSeek stand to reshape expectations around AI’s infrastructure needs, said the manager.
Evolving AI governance alongside geopolitical developments such as US President Donald Trump’s sweeping tariffs could also “introduce new layers of complexity and regulatory uncertainty for data centre demand”.
Units of Keppel DC Reit closed 3 per cent or S$0.06 higher at S$2.05 on Wednesday.
