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
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TTM Distribution Breakdown:93.6% from Operation3.1% from Management Fees Paid in Units0.2% from Income Support3.1% being Retained
Trends (Up to 10 Years)
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Uptrend: DPU from Operation, NAV per Unit, Committed Occupancy
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Flat: Operating Distributable Income Margin, Operating Distribution Proportion
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Downtrend: Adjusted Interest Coverage Ratio, Property Yield, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital
Price Range & Relative Valuation Metrics
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Dividend Yield: Below -2SD for 1y; Below -1SD for 3y & 10y; Average for 5y
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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.
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