Keppel DC REIT’s income slips by 2.5% to $21m

Gains from its Citadel 100 went unrecognised.

A hiccup caused by a client downsizing its requirements at Citadel 100 ultimately dragged Keppel DC REIT’s earnings for this quarter, as gross revenue declined by 4.5% to $24.8m.

According to a report by OCBC, the scuffle at Citadel 100 resulted in the asset’s occupancy slipping from 77.4% to 52.8%.

“Consequently, overall portfolio occupancy declined from 94.8% to 92.0%. However, this issue had already been flagged out by management during the last quarter,” OCBC said.

Meanwhile, OCBC added that the REIT is currently working on a few prospective tenants, which are expected to take up a substantial portion of the vacated space if negotiations prove to be successful.

“Besides Citadel 100, KDCREIT is also actively working on securing renewals for major leases which are expiring for the remainder of this year and 2017,” OCBC said.

“1Q16 revenue formed 23.5% of our FY16 forecast. However, DPU grew 3.7% YoY to 1.67 S cents, and this was driven by a higher NPI margin, net realised gains on derivatives and lower tax expenses,” OCBC added.

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