Digital Core REIT (DCREIT) has reported distribution per unit (DPU) of 3.60 US cents (4.87 cents) for the FY2024 ended Dec 31, 2024, 2.7% y-o-y lower than the 3.70 US cents declared for the reporting period a year ago.
Accordingly, the REIT’s DPU for the 2HFY2024 came in at 1.80 US cents, 1.1% higher y-o-y. This was calculated based on the 1,300,293,718 issued units as at Dec 31, 2024, as compared to the 2HFY2023 DPU, which was calculated based on the 1,123,853,481 issued units as at Dec 31, 2023.
DCREIT’s gross revenue for the FY2024 declined by 0.3% y-o-y to US$102.3 million, while the 2HFY2024 gross revenue rose 9.8% y-o-y to US$54.01 million.
The REIT says that the 2HFY2024 gross revenue was higher than the same period a year before largely due to straight-line rent written off in 2HFY2023 attributable to a customer bankruptcy.
The decrease in rental income from the divestment of 2401 Walsh Avenue and 2403 Walsh Avenue was largely offset by increased colocation income from the two Los Angeles assets (3015 Winona and 200 North Nash) as well as additional contribution from the newly acquired Frankfurt Facility in December 2024.
Meanwhile, gross revenue for the full year FY2024 was marginally lower due to the decrease in rental income from the divestment of the 2401 Walsh Avenue and 2403 Walsh Avenue assets.
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DCREIT says that this variance was partially offset by the increased colocation income from the two Los Angeles assets 3015 Winona and 200 North Nash, and the additional contribution from the newly acquired Frankfurt Facility in December 2024.
Net property income (NPI) for the FY2024 fell by 1.9% y-o-y to US$61.9 million, but rose by 12.6% y-o-y for the 2HFY2024 period to US$31.4 million.
Same store cash NPI rose by 0.7% y-o-y for the FY2024 to $59.1 million, and rose by 0.1% y-o-y for the 2HFY2024 to US$28.8 million. This includes the results of properties owned as at Dec 31, 2022 and excludes non-cash straight line rent adjustments.
The higher cash NPI from rental escalations and free rent burn off for the North America properties (excluding 371 Gough Road and the LA Assets) was offset by lower cash NPI at 371 Gough Road due to higher short-term rents in 2HFY2023 despite the asset being leased up to 100% in 4Q2024.
Also, during the period, there was a decreased cash NPI contribution from 3015 Winona and 200 North Nash as the group took over the operations of the colocation end-customers in 4Q2024 which resulted in one-time integration costs.
The REIT’s annualised distribution yield for the FY2024 rose by 47 basis points (bps) to 6.21% from 5.74% previously, while the 2HFY2024 yield rose by 43 bps to 6.17% from 5.74% previously.
The DPU of 1.80 US cents for the 1HFY2025 will be paid out on March 28, 2025 to unit holders.
DCREIT maintained a portfolio occupancy of 96.7% for the FY2024, and a weighted average lease expiry (WALE) of 4.8 years. It has assets under management (AUM) of US$1.6 billion and 10 data centres.
For the reporting period, it has a total debt outstanding of US$552 million, and an aggregate leverage of 34%. Its average cost of debt is 3.9%, and interest coverage ratio is 3.6 times.
For the full year of 2024, DCREIT repurchased a total of 27.0 million units at an average price of 57.6 US cents, generating DPU accretion of approximately 1.8%. The units were held as treasury units and were subsequently cancelled.
Units in Digital Core REIT closed 0.5 cents higher, or 0.98% up, at 52 US cents on Feb 12.
