Keppel DC REIT's Q3 DPU soars 16.8% to 1.74 cents

Thanks to four properties brought over the year.

Keppel Data Centre REIT's (Keppel DC REIT) is on a tear as distribution per unit (DPU) in Q3 grew 16.8% YoY to 1.74 cents.

Over the last 12 months, Keppel DC REIT bought four new properties in Cardiff, Singapore, Milan and Dublin.

DBS analyst Derek Tan said, "We believe with stable growth in the existing portfolio, DPU growth will be led inorganically by acquisitions. Given the REIT’s low cost of capital, the world is its playground for accretive acquisitions."

Gross rental income soared 56.4% to $34.2m YoY, thanks to the DCs in Milan, Cardiff, and B10, along with the 90% interest in Keppel DC REIT SGP 3.

Net property income (NPI) also rose 42.1% to $32.2m.

Here's more from DBS Equity Research:

Portfolio occupancy is high at 93.4%, though no improvement has been seen at Basis Bay DC (Cyberjaya, Malaysia) after the single tenant (11.2% of 2016 revenue) renewed its lease with two-thirds of the space previously occupied. We had already made an adjustment to our earnings forecast last quarter. Portfolio WALE is long and healthy at 9.2 years.

Keppel DC REIT announced the acquisition of Dataplex located at unit B10 of the Ballycoolin Business and Technology Park in Dublin at an agreed value of EUR66.0m (approximately S$101.3m). We estimate the NPI yield of the new asset to be 7.5% and contributions to be immediately accretive to DPU, lifting FY18F DPU by 5.5% to 7.72 cents.

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