Keppel DC REIT misses 4Q 2016 DPU forecast by 21.6% on enlarged base

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Keppel DC REIT has achieved a DPU of 1.31 Singapore cents for its 4Q 2016, missing its IPO forecast of 1.67 cents for the period by 21.6%, and lower from the 1.64 cents achieved in 4Q 2015 by 20.1%.

Gross revenue and net property income (NPI) for the period came in at SGD26.8 million (USD18.8 million) and SGD24.9 million, beating forecasts for the quarter by 4.2% and 14.1% respectively, although distributable income came in largely within expectations at SGD14.8 million.

Correspondingly FY 2016 DPU came in at 6.14 cents, 7.7% lower than the 6.65 cents predicted for the financial year.

The lower DPUs are partly due to an enlarged base.

During the quarter, Keppel DC REIT listed approximately 242 million new units on 15 November 2016, pursuant to a preferential offering exercise that accompanied the acquisition of Keppel DC Singapore 3.

The new units are entitled to the distributable income for 2H 2016, said the REIT in its statement on 23 January.

“There was also a period of 1.5 months for which there was no income contributed by Keppel DC Singapore 3 as the acquisition was completed later than expected”, the REIT added.

Discounting the effect of the new units, DPU for FY 2016 would have been 6.68 cents, 0.5% higher than IPO forecast and 2.6% higher than FY 2015, said Keppel DC REIT.

In 4Q 2016, the REIT’s portfolio occupancy rate rose from 92.7% to 94.4% while its weighted average lease expiry (WALE) was extended from 8.6 years to 9.6 years.

The REIT’s aggregate leverage was at 28.3% as at 31 December 2016, with a weighted average debt maturity of 3.2 years, and an average annualised cost of debt of 2.3%.

Against the backdrop of an uncertain economy, Keppel DC REIT has indicated that it sees continued growth potential in the data centre industry.

“The expanding requirements of the digital economy and massive-scale cloud providers will continue to propel wholesale colocation growth”, said the REIT, adding that demand for data centre space remains strong in Asia Pacific and Europe.

Units of Keppel DC REIT finished the trading day unchanged from its previous close on the Singapore Exchange to end at SGD1.215.

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