Keppel DC (AJBU) Q2 2026 earnings summary

Executive summary

• Distributable income for 1H 2026 rose 18.5% year-over-year to $150.7 million, with DPU up 11.3% to 5.714 cents, driven by organic growth, acquisitions, and strong contract renewals in Singapore and Australia.

• Gross revenue increased 14.5% year-over-year to $242.0 million, supported by positive rental reversions, escalations, and the acquisition of Tokyo Data Centre 3.

• Portfolio occupancy stood at 92.5% as of 30 June 2026, with a WALE of 6.7 years and 95% contracted power capacity.

• Portfolio reversion for the period was around 10%.

• Portfolio size reached $6.3 billion, comprising 25 data centres across Asia-Pacific and Europe.

Financial highlights

• Net property income grew 15.1% year-over-year to $210.4 million.

• Property expenses rose 11.1% to $31.7 million, while finance costs increased 25.2% to $30.7 million due to acquisition loans.

• DPU for 1H 2026 is 5.714 cents, with payment scheduled for 18 September 2026.

• Aggregate leverage improved to 34.0% as of 30 June 2026, mainly due to loan repayments.

• Interest coverage ratio stood at 6.9x; average cost of debt was 2.6% for 1H 2026, with 87% of borrowings on fixed rate.

Outlook and guidance

• Data centre demand is projected to grow at a 25% CAGR to 256GW by 2030, with Asia Pacific expected to account for 34% of demand.

• Macroeconomic uncertainty persists due to geopolitical tensions, inflation, and potentially higher-for-longer interest rates.

• Portfolio reversion for the full year expected to be around 10%, with Q3 likely in the low teens due to Gore Hill renewal.

• Manager remains focused on disciplined growth in hyperscale assets, financial flexibility, and accretive acquisitions in Tier 1 markets.

• No immediate redevelopment or AEI plans for Cardiff; focus remains on re-leasing and exploring options.