Digital Core REIT's 7.2% Yield Looks Great. The Balance Sheet Behind It Doesn't.🦖
Digital Core REIT's 7.2% Yield Looks Great. The Balance Sheet Behind It Doesn't.🦖
🔍 The Angle
What if a “safe” 7.2% data centre yield is really your balance sheet working overtime, not your tenants paying more rent? Digital Core REIT’s DPU held at 1.80 US cents even as NPI fell 5.7% and net profit dropped 19.8%, helped by unit buybacks and adjustments. That gap between the story on the slide and the story in the numbers is exactly where I start worrying for CPF and SRS money.
💰 What It Means For You
If you are drawing income, a 7.2% yield with 39.2% gearing and interest cover around 3.2–3.3x means there is less buffer than the headline suggests. One tenant accounts for roughly 30% of rent and most of your payout arrives in US dollars, so a single renewal decision or FX swing can move your actual SGD income more than you expect. Iggy's Forensic Zone: Zone 4, Caution, is my way of flagging that this is now a balance sheet and concentration story, not just an AI demand story.
📺 YouTube: https://youtu.be/NXQ_YkPU66o
📩 Substack: https://investingiguana.com/p/digital-core-reits-72-yield-looks
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