In 1QFY2026, for the three months to March 31, Keppel DC REIT’s gross revenue rose by 18.4% y-o-y to $120.96 million while net property income (NPI) increased by 19.4% to $105.17 million. Distributable income rose by 20.7% to $74.6 million translating into a 13.2% rise y-o-y in distributions per unit (DPU) to 2.833 cents. On an annualised basis, and with the closing price on April 15, DPU translates into a yield of 4.86%.
The higher NPI was mainly due to the acquisition of Tokyo Data Centre 3; higher contributions from contract renewals and escalations but partially offset by the divestment of Kelsterbach Data Centre.
The higher distributable income and DPU were also mainly due to contributions from strong portfolio performance, acquisitions of Tokyo Data Centre 3 and remaining interests in Keppel DC Singapore 3 and 4. Finance costs were higher mainly due to new acquisition loans drawn in 4Q2025 but average cost of debt in 1Q2026 was a low 2.6%, down 20 bps q-o-q.
Rental reversions in 1Q2026 were a startling +50.3%. The portfolio was underpinned by renewal of major contracts done in 2024 and 2025. In 2026 and 2027, 6% of rental income is up for renewal a year. Stable portfolio occupancy is likely to be anchored by largely contracted data centre spaces that counter-balance movements in non-data centre areas.
The REIT manager says there is likely to be a limited first-order impact from ongoing Middle East conflict since net electricity costs account for less than 3% of operating expenses with power procurement contracts in place through end-2026. Second-order risks are being monitored, the manager says.
