Keppel DC REIT, a data center-focused real estate investment trust in Singapore, today announced its financial results for the full-year ended December 31, 2021 (FY 2021) and shared its latest valuation marks for its data center portfolio.

Financial Performance in FY 2021 – Keppel DC REIT

In FY 2021, Keppel DC REIT reported gross revenue of S$271.1m ($200.5m USD), a 2.1% increase year-over-year, and net property income of S$248.2m ($183.5m USD), a 1.6% increase year-over-year. Therefore, the company’s net property income margin was 91.5% in FY 2021, a ~40 bps decline year-over-year.

Operational Performance in FY 2021 – Keppel DC REIT

Portfolio

Pro forma for pending acquisitions, Keppel DC REIT operates 21 data centers in Asia-Pacific and Europe comprising 2.6 million sqft. As of December 31, 2021, this data center portfolio amounted to assets under management (AUM) of S$3.5bn ($2.6bn USD). Geographically, ~54% of Keppel DC REIT’s portfolio valuation is derived from its Singapore data centers.

Data CenterLocationsqftSGDUSD
Keppel DC Singapore 1Singapore110kS$336m$248m
Keppel DC Singapore 2Singapore38kS$183m$135m
Keppel DC Singapore 3Singapore49kS$281m$208m
Keppel DC Singapore 4Singapore84kS$422m$312m
Keppel DC Singapore 5Singapore93kS$356m$264m
DC1Singapore214kS$273m$202m
Basis Bay Data CentreCyberjaya, Malaysia48kS$22m$16m
Gore Hill Data CentreSydney, Australia91kS$224m$166m
Intellicentre CampusSydney, Australia174kS$102m$76m
Guangdong Data CentreGuangdong, China222kS$148m$109m
Cardiff Data CentreCardiff, UK79kS$47m$35m
GV7 Data CentreLondon, UK25kS$66m$49m
London Data CentreLondon, UK95kS$106m$78m
Almere Data CentreAlmere, Netherlands118kS$155m$115m
Amsterdam Data CentreAmsterdam, Netherlands142kS$45m$33m
Eindhoven CampusEindhoven, Netherlands84kS$57m$42m
Keppel DC Dublin 1Dublin, Ireland68kS$151m$111m
Keppel DC Dublin 2Dublin, Ireland28kS$141m$104m
Milan Data CentreMilan, Italy165kS$61m$45m
maincubes Data CentreOffenbach, Germany97kS$155m$115m
Kelsterbach Data CentreKelsterbach, Germany541kS$124m$92m
Total Portfolio2.6mS$3.5bn$2.6bn

For FY 2021, Keppel DC REIT marked-up the valuation of its six Singapore data centers by an average of 11%, as compared to FY 2020. Specifically, this valuation uplift, in isolation, was equivalent to S$185.9m ($137.5m USD). For example, the company’s DC1 facility was marked-up by 29%, while Keppel DC Singapore 3 had its valuation increased by 18%.

Utilization

As of FY 2021, Keppel DC REIT’s portfolio occupancy rate was 98.3%, with a weighted average lease expiry (WALE) of 7.5 years by leased area. Notably, the company has near-term vacancy risk at its Keppel DC Singapore 4 (0.7-year WALE) and Basis Bay Data Centre in Malaysia (0.5-year WALE) facilities.

Pipeline

Keppel DC REIT notes that it has a data center acquisition pipeline of >S$2bn ($1.5bn USD). Specifically, these data center assets are under development and management through Keppel Telecommunications & Transportation (T&T) and Keppel’s private data center funds. For example, Keppel T&T has granted rights of first refusal (ROFR) to Keppel DC REIT for future acquisition opportunities of its data center assets.

Additionally, Keppel DC REIT has a ROFR for the remaining 5 data centers within Bluesea’s campus in Jiangmen, Guangdong, China.

Acquisitions, Divestitures in FY 2021 – Keppel DC REIT

Keppel DC REIT expanded its portfolio in FY 2021 with ~$285m USD in acquisitions of data centers and network assets.

Data Centers

During 2021, Keppel DC REIT pursued the following data center acquisitions and divestitures:

  • United Kingdom: acquiring a data center and office property, known as Waterside House, in Bracknell, United Kingdom for £57.0m ($76.5m USD)
  • Netherlands: acquired two data center buildings in Eindhoven, the Netherlands, for €37.2m ($44.2m USD)
  • China: acquired a fully-fitted data center facility in the city of Jiangmen, Guangdong Province, China for $98.4m USD (RMB636m)
  • Australia: divested its iseek Data Centre located in Brisbane, Australia, for A$34.5m ($25.0m USD) to iseek

Mobile, Fixed, and Fiber

Beyond data centers, Keppel DC REIT expanded its investment mandate to include real estate and assets in the “digital connectivity” sector. As such, in 2021, Keppel DC REIT invested in M1’s mobile, fixed, and fiber assets (NetCo), purchasing $65.8m USD (S$88.7m) of bonds and $740k USD (S$1.0m) in preference shares issued by NetCo.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing.

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