Keppel DC REIT's 3QFY24 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue improved YoY due to the strong performance of its existing portfolio and the contribution from the newly acquired Tokyo DC 1. However, NPI remained similar YoY due to the loss allowance for Guangdong DCs. Distributable income and DPU have remained relatively stable, thanks to higher finance income from Australis DC note and the partial distribution of the DXC settlement sum, which offset the impact of the loss allowances and higher finance costs.

Acquisition

On 31 July, KDC completed the acquisition of the Japan Data Centre in Tokyo, expanding its property portfolio.

Related Parties Shareholding

The shareholdings for the sponsor and directors of the REIT manager are relatively low.

Lease Profile

WALE is relatively long, however, weighted average land lease expiry is relatively short.

Debt Profile

The cost of debt is low and debt is 100% unsecured. Additionally, the interest coverage ratio is high. However, there is a concentration of debt maturities in 2027.

Diversification Profile

The portfolio demonstrates diversification in terms of properties but remains concentrated in terms of tenants' contributions.

Key Financial Metrics

Overall, KDC's financial metrics are excellent.

DPU Breakdown

• TTM Distribution Breakdown:
• 93.6% from Operation
• 3.1% from Management Fees Paid in Units
• 0.2% from Income Support
• 3.1% being Retained

Trends (Up to 10 Years)

• Uptrend: DPU from Operation, NAV per Unit, Committed Occupancy
• Flat: Operating Distributable Income Margin, Operating Distribution Proportion
• Downtrend: Adjusted Interest Coverage Ratio, Property Yield, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital

Price Range & Relative Valuation Metrics

• Dividend Yield: Below -2SD for 1y; Below -1SD for 3y & 10y;  Average for 5y
• P/NAV - Above +2SD for 1y; Above +1SD for 3y; Average for 5y & 10y

Author's Opinion

KDC's performance has improved compared to the previous quarter, primarily due to higher finance income from Australis DC note and the contribution from the newly acquired Tokyo DC 1. For debt, there is no refinancing requirement in 2024 and only 6.3% of debt maturing in 2025.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.