Keppel DC (AJBU) Q3 2024 earnings summary

Executive summary

• 3Q 2024 DPU rose 6.1% quarter-on-quarter to 2.501 cents, supported by strong rental reversions and portfolio growth.

• Completed acquisition of Tokyo Data Centre 1 on 31 July 2024, enhancing geographical diversification.

• Portfolio occupancy remained high at 97.6% with a WALE of 6.3 years by lettable area.

• Active portfolio rebalancing and capital management to capture opportunities in AI and digital transformation.

Financial highlights

• Gross revenue for 3Q 2024 was $76.9m, up 4.2% from 2Q 2024 and 8.9% year-over-year.

• Net property income increased 4.6% quarter-on-quarter to $64.5m.

• Distributable income grew 6.3% quarter-on-quarter to $44.7m.

• DPU of 2.501 cents, up 6.1% quarter-on-quarter and 6.1% year-over-year.

• Higher finance income from Australia Data Centre Note; finance costs rose slightly due to Tokyo DC 1 acquisition.

Outlook and guidance

• Data centre sector experiencing robust global growth, driven by digital transformation and AI adoption.

• Colocation demand rose 25.8% year-over-year in 1Q 2024, mainly from cloud service providers.

• Vacancy rates in major European markets expected to fall below 10% in 2024.

• Focus on cost efficiencies, sustainability, and expanding build capacities to address sector challenges.