I am catching up on the financial results of REITs in my stock portfolio. On 25th July 2025, Keppel DC REIT has released its financial results for the first half of 2025. Keppel DC REIT’s financial results showcased a resilient performance despite ongoing portfolio adjustments and macroeconomic headwinds. The Singapore-listed data centre real estate investment trust reported strong year-on-year growth in gross revenue and net property income (NPI), driven by rental escalations, contract renewals, and finance income contributions. These gains were partially offset by the absence of one-off income from prior periods and the divestment of certain assets.
One of the standout metrics from the 1H 2025 results was the impressive portfolio rental reversion of approximately 51%, reflecting the REIT’s ability to renew contracts at significantly higher rates. This was largely attributed to major renewals across its colocation assets, which continue to benefit from robust demand in the digital infrastructure space. The weighted average lease expiry (WALE) by rental income stood at 4.7 years, underscoring the stability of Keppel DC REIT’s tenant base.
Distributable income saw a notable increase, supported by lower interest costs and finance income from the Australia Data Centre Note. However, the distribution per unit (DPU) rose by a more modest 12.8% due to a larger unitholder base following recent equity issuances. The REIT declared a DPU of 5.133 cents.
| 1H 2025 (S$’000) |
1H 2024 (S$’000) |
Change (%) | |
| Gross Revenue | 211,309 | 157,180 | 34.4 |
| Net Property Income | 182,813 | 132,649 | 37.8 |
| Property Expenses |
(28,496) | (24,531) | 16.2 |
| Finance Costs | (24,544) | (25,907) | (5.3) |
| Distributable Income | 127,128 | 80,878 | 57.2 |
| Distribution Per Unit (“DPU”) (cents) | 5.133 | 4.549 | 12.8 |
Strategically, Keppel DC REIT continued to refine its portfolio. The divestment of Intellicentre Campus and Kelsterbach Data Centre, along with the anticipated sale of Basis Bay Data Centre in Malaysia by 3Q 2025, signals a shift towards higher-yielding and more scalable assets. At the same time, the trust is targeting full ownership of Keppel DC Singapore 7 and 8 by the second half of the year, a move that could enhance operational control and long-term value.
On the capital management front, Keppel DC REIT completed all refinancing requirements for 2025, positioning itself well against interest rate volatility. The average cost of debt declined, reflecting prudent financial stewardship and proactive loan repayments. These efforts contributed to interest savings that helped cushion the impact of asset divestments and the absence of one-off income received in 2024.
Looking ahead, Keppel DC REIT remains focused on strengthening its portfolio through selective acquisitions and proactive asset management. With digital transformation accelerating across industries, demand for data centre space continues to grow, offering long-term tailwinds for the REIT. Its disciplined approach to capital allocation, combined with a robust pipeline of opportunities, positions Keppel DC REIT to deliver sustainable growth and attractive returns for unitholders.
Summary of Keppel DC REIT 1H 2025 Financial Results
As usual, let me summarize the pro and cons based on Keppel DC REIT’s 1H 2025 financial results. The pros are:
- Gross revenue, Net Property Income grew 34.4% and 37.8% respectively year-on-year.
- Distribution Per Unit grew 12.8% year-on-year.
- High portfolio occupancy of 95.8%.
- Achieved reversion of more than 50% for a major contract renewal in 2Q 2025.
- Healthy gearing ratio (aggregate leverage) of 30.0%.
- Keppel DC REIT had completed all 2025 refinancing.
The cons are:
- Based on Keppel DC REIT share price of S$2.36 on 19-Sep-25 and FY2024 full year distribution of 9.451 cents, this translates to a low current dividend yield of 4.00%. Investors who wish to buy Keppel DC REIT may need to wait for a more attractive price.
For investors who do not mind the low current dividend yield and seeking exposure to the digital economy through a stable and income-generating vehicle, Keppel DC REIT’s 1H 2025 performance reaffirms its role as a leading player in Asia’s data centre REIT landscape.