Digital Core REIT Review @ 2 May 2023
Basic Profile & Key Statistics
Main Sector(s): Industrial
Country(s) with Assets: United States & Canada
No. of Properties (exclude development/associate/fund): 11
Key Indicators
Performance Highlight
Gross revenue has improved slightly YoY, however, NPI and distributable income declined YoY mainly due to higher property expenses, finance expenses as well as tax expenses.
Related Parties Shareholding
REIT Sponsor's Shareholding: Above median by 20% or more
REIT Manager's Shareholding: Below median by 20% or more
Directors of REIT Manager's Shareholding: Below median by 20% or more
Lease Profile
Occupancy: ± 5% from median
WALE: ± 10% from median
Highest Lease Expiry within 5 Years: Above median by 20% or more; Falls in 2025
Weighted Average Land Lease Expiry: 100% Freehold Properties
Debt Profile
Gearing Ratio: Below median by 10% or more
Cost of Debt: Above median by 10% or more
Fixed Rate Debt %: ± 10% from median
Unsecured Debt %: 100%
WADM: Above median by 20% or more
Highest Debt Maturity within 5 Years: Above median by 20% or more; Falls in 2026
Interest Coverage Ratio: Above median for more than 20%
Diversification Profile
Top Geographical Contribution: Below median by 20% or more
Top Property Contribution: ± 10% from median
Top 5 Properties' Contribution: Above median by 20% or more
Top Tenant Contribution: Above median by 20% or more
Top 10 Tenants' Contribution: Above median by 20% or more
Key Financial Metrics
Property Yield: ± 10% from median
Management Fees over Operating Distributable Income: Above median by 20% or more; $4.22 distribution for every dollar paid
Operating Distributable Income on Capital: Below median by 10% or more
Operating Distributable Income Margin: Below median by 20% or more
Operating Distribution Proportion: Below median by 10% or more
DPU Breakdown
TTM DPU Breakdown80.9% from Operation19.1% from Management Fees Paid in Units
Trends
* DPU in 4Q 2021 is adjusted to 3 months DPU.
Slight Downtrend: NAV per Unit, Occupancy, Property Yield
Downtrend - DPU from Operation, Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin
Relative Valuation
P/NAV: Below -1SD for 1y & 3y
Dividend Yield: Above +2SD for 1y & 3y
Author's Opinion
Performance has improved slightly as compared to the previous quarter. With regard to the vacancy in Toronto resulting from Sungard's bankruptcy, the manager has successfully extended 14 short-term colocation contracts and has replaced two-thirds of Sungard’s rental obligation for 2023. There is no significant update regarding Cyxtera's credit rating downgrading event, which is the second largest tenant that accounted for 22.4% of annualized rent.
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- FALCON·2023-05-07niceLikeReport