Keppel DC REIT’s 4Q DPU falls 20.1% to 1.31 Singapore cents on preferential offering

SINGAPORE (Jan 23): Keppel DC REIT has posted a distribution per unit (DPU) of 1.31 Singapore cents for the fourth quarter ended December 2016, down 20.1% from 1.64 Singapore cents a year ago and 21.6% lower than its initial public offering (IPO) forecast of 1.67 Singapore cents.

This also brings the trust’s DPU for the full year to 6.14 Singapore cents in FY2016, 5.7% lower than its FY2016 DPU of 6.51 Singapore cents.    

The lower quarterly and annual DPU figures are mainly due to Keppel’s pro-rata preferential offering with the acquisition of Keppel DC Singapore 3 (KDC SGP 3), says Keppel Corp in its results filing to the SGX on Monday.

Excluding the impact of the pro-rata preferential offering, adjusted DPU for FY2016 would have been 6.68 Singapore cents.

Additionally, there was a period of 1.5 months for which there was no income contributed by KDC SGP 3 as the acquisition was completed later than expected, adds the manager.

While distributable income exceeded Keppel DC REIT’s IPO forecasts by 4% at S$61 million (RM190.5 million), this was partially offset by lower rental income “arising from a client downsizing its requirements” in Keppel DC Dublin 1 in 1Q2016, as well as a drop in variable income at the REIT’s Singapore properties due to lower recurring and power revenue.

A distribution of 2.8 Singapore cents per unit has been declared for 2H2016, and distributions will be paid out on Feb 28.

In its outlook, the manager of Keppel DC REIT says it remains confident of the data centre market’s long-term potential despite the increase in data centre space in Singapore, which is expected to exert near-term pressure on rental rates.

Units of Keppel DC REIT closed flat at S$1.22. — theedgemarkets.com.sg