Digital Core Reit H1 DPU unchanged at US$0.018

[SINGAPORE] The manager of Digital Core Real Estate Investment Trust (Reit) on Wednesday (Jul 23) posted a distribution per unit (DPU) of US$0.018 for the first half ended June 30, 2025.

This was unchanged from the same period a year ago, even as the Reit’s distributable income rose 3.5 per cent to US$23.4 million, from US$22.6 million in H1 FY2024.

The distribution will be paid on Sep 18, after the record date on Jul 31.

Digital Core Reit’s H1 FY2025 revenue increased 84.2 per cent to US$88.9 million, from US$48.3 million in the year-ago period. Net property income rose 52.2 per cent year on year to US$46.3 million.

However, property expenses also rose to US$42.6 million, from US$17.8 million for H1 FY2024.

The Reit’s manager said these increases in revenue, net property income and property expenses were mainly due to the acquisition of an additional 15.1 per cent interest in a Frankfurt data centre last December.

The acquisition brought the Reit’s interest in the facility up to 65 per cent, from 49.9 per cent before.

The total purchase outlay amounted to about US$76.6 million. This comprised a purchase consideration of 71 million euros (S$100.6 million), an acquisition fee of around US$751,000 paid to the Reit’s manager in the form of around 1.2 million newly issued Digital Core Reit units, and other fees.

Also contributing to Digital Core Reit’s higher property expenses in H1 FY2025 were repair and maintenance integration costs for its assets in Los Angeles, California, as well as a loss allowance for a receivable from a legacy customer at 1500 Science Park in Silicon Valley, said the manager. 

As at Dec 31, 2024, Digital Core Reit had about US$1.7 billion in assets under management. It has 11 data centres and a weighted average lease expiry of 4.5 years, with a 98 per cent occupancy rate as at Jun 30, 2025.

In March, the Reit completed the purchase of a 20 per cent interest in a data centre in Osaka – its second in the Japanese city – for 13 billion yen (S$110 million). The transaction is expected to be 1.8 per cent accretive to the Reit’s DPU, said the manager.

Digital Core Reit’s gearing, as at Jun 30, stands at 38.3 per cent; it has US$675 million of total debt outstanding, all of which is unsecured. Year-to-date weighted average cost of debt, excluding amortisation of upfront debt fees, is 3.6 per cent and the weighted average debt to maturity is 4.2 years.

Looking ahead, the Reit’s manager said it plans to “maximise organic growth primarily through leasing activity and to maintain financial flexibility and leverage debt capacity to pursue accretive investments”.

To this end, it will focus on “expanding (its) asset base, enhancing diversification and capitalising on strong tailwinds” in areas such as hyperscale demand and digital transformation.

John J Steward, chief executive officer of the Reit’s manager, noted that data centre fundamentals “continue to tighten across core global markets”. “We remain focused on capitalising on the favourable industry backdrop to continue to create durable value for unitholders,” he added.

Units of Digital Core Reit ended Wednesday 0.9 per cent or US$0.005 lower at US$0.555, before the results were posted.