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Keppel DC Reit’s year-to-date distribution per unit (DPU) of 5.20 Singapore cents was within expectations and two percent above the IPO forecast due to higher variable rent from Singapore, lower-than-expected borrowing costs and new contribution from Intellicentre 2 (IC2), said Credit Suisse.
Net property income stood at S$69.5 million, up 17 percent from its IPO forecast of S$68.3 million, while distributable income was S$45.9 million, also up by 1.8 percent from its IPO forecast of S$45.1 million, said Keppel DC Reit in a release.
On a quarterly basis, the trust registered a DPU of 1.64 Singapore cents.
The REIT’s Q3 net property income of S$21.4 million was 0.3 percent below IPO forecast while distributable income was 2.2 percent above IPO forecast at S$14.5 million.
Keppel DC Reit revealed that its manager had hedged 100 percent of the forecasted foreign-sourced distribution up to 1H 2017 with foreign currency forward contracts.
With this, Credit Suisse maintained an Outperform rating on Keppel DC Reit.
“We believe the REIT provides among the highest stability given its long WALE, barriers to entry and strong underlying industry growth. Additionally, potential for continued yield accretive acquisitions should provide further upside, in our view,” it said.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.