Keppel DC REIT's 1Q FY25 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

KDC delivered a strong YoY performance for 1Q 2025, with improvements across gross revenue, NPI, finance income, distributable income, and DPU. Key drivers include:

• Contributions from the acquisition of Keppel DC Singapore 7 & 8 and Tokyo Data Centre 1 in 2024
• Positive rental reversions and escalations
• Higher finance income from the Australia Data Centre Note

These gains were partially offset by the divestment of Intellicentre Campus and a one-off dispute settlement in 2024. Finance costs also declined, supported by lower interest rates and savings from loan repayments.

Rental Reversion & Divestment

KDC recorded a 7% rental reversion in 1Q 2025. In terms of portfolio rebalancing:

• Kelsterbach Data Centre (Germany) divestment was completed in March 2025
• Basis Bay Data Centre (Malaysia) divestment is on track to be completed by 3Q 2025

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable
• REIT Manager's Shareholding: Moderate
• Directors of REIT Manager's Shareholding: Less Favorable

Lease Profile

• Committed Occupancy: Moderate
• Highest Annual Lease Expiry in 4 Years: Favorable
• WALE: Moderate
• Weighted Average Land Lease Expiry: Less Favorable

Debt Profile

• Adjusted Interest Coverage Ratio: Favorable
• Cost of Debt: Favorable
• Gearing Ratio: Favorable
• Fixed Rate Debt Proportion: Moderate
• Unsecured Debt Proportion: Favorable
• Highest Annual Debt Maturity in 4 Years: Moderate
• WADM: Moderate

Diversification Profile

• Top Geographical Weightage: Moderate
• Top Property Weightage: Moderate
• Top 5 Properties' Weightage: Favorable
• Top Tenant Weightage: Moderate
• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Favorable
• Operating Distributable Income over Manager's Fees: Moderate
• Operating Distributable Income on Capital: Favorable
• Operating Distributable Income Margin: Favorable
• Operating Distribution Proportion: Favorable

DPU Breakdown

• TTM Distribution Breakdown:
• 91.4% from Operation
• 2.8% from Management Fees Paid in Units
• 0.1% from Income Support
• 5.8% being Retained

Trends (Up to 10 Years)

• Uptrend: DPU from Operations, NAV per Unit, Committed Occupancy
• Slight Uptrend: None
• Flat: Operating Distributable Income Margin, Operating Distribution Proportion
• Slight Downtrend: Top 10 Tenants' Weightage
• Downtrend: Adjusted Interest Coverage Ratio, Top 5 Properties' Weightage, Property Yield, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital

Price Range & Relative Valuation Metrics

• Dividend Yield: Average for 1y, 3y, 5y & 10y
• P/NAV: Average for 1y, 3y, 5y & 10y

Author's Opinion

Compared to the previous quarter, overall performance has strengthened, backed by strategic acquisitions and steady rental growth. On the debt front, only 2.2% of total borrowings are due 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.