REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Monday, August 08, 2022

Digital Core REIT Review @ 8 August 2022

Basic Profile & Key Statistics
  • Main Sector(s): Industrial
  • Country(s) with Assets: United States & Canada
  • No. of Properties (exclude development/associate/fund): 10

Key Indicators

Performance Highlight
Despite similar gross revenue as per forecast, the NPI is 5.9% above the forecast figure. However, distributable income and DPU are both slightly lower than forecast. This is mainly due to the finance expenses being 42.6% above forecast.

Related Parties Shareholding

  • REIT sponsor's shareholding: Above median for more than 20%
  • REIT manager's shareholding: Above median for more than 20%
  • Directors of REIT manager's shareholding: 0%

Lease Profile

  • Occupancy: 100%
  • WALE: Above median for more than 20%
  • Highest lease expiry within 5 years: Above median for more than 20%; Falls in 2025
  • Weighted average land lease expiry: 100% Freehold Properties

Debt Profile

  • Gearing ratio: Below median for more than 20%
  • Cost of debt: ± 10% from median
  • Fixed rate debt %: Below median for more than 20%
  • Unsecured debt %: 100%
  • WADM: Above median for more than 20%
  • Highest debt maturity within 5 years: 100% falls in 2026
  • Interest coverage ratio: Above median for more than 20%

Diversification Profile

  • Top geographical contribution: Below median for more than 20%
  • Top property contribution: ± 10% from median
  • Top 5 properties' contribution: Above median for more than 20%
  • Top tenant contribution: Above median for more than 20% 
  • Top 10 tenants' contribution: Above median for more than 20% 

Key Financial Metrics

  • Property yield: ± 10% from median
  • Management fees over distribution: Above median for more than 20%; $4.69 distribution for every dollar paid 
  • Distribution on capital: ± 10% from median
  • Distribution margin: ± 10% from median


There are only 2 full quarters since listed, therefore let's review the trend later. 

Relative Valuation

  • P/NAV: Below -1SD for 1y
  • Dividend Yield: Above average for 1y

Author's Opinion

 Favorable Less Favorable
High REIT Sponsor's ShareholdingLow Directors of REIT Manager's Shareholding
High REIT Manager's ShareholdingConcentrated Lease Expiry
100% OccupancyLow Fixed Rate Debt %
Long WALEConcentrated Debt Maturity
All Freehold PropertiesHigh Top 5 Properties Contribution
Low Gearing RatioHigh Top Tenant & Top 10 Tenants Contributions
100% Unsecured DebtNon Competitive Management Fees
Long WADM 
High Interest Coverage Ratio 
Low Top Geographical Contribution

Overall, the actual 1H performance is very close to the IPO forecast. As for the fifth largest customer bankruptcy event, the manager has entered into a cash flow support agreement with the sponsor whereby the sponsor will provide cash flow support from Apr 2022 to Dec 2023, which shall not exceed US$7.5 million. In turn, Digital Core REIT shall repay the sponsor from time to time from Jan 2024 to Dec 2028, either in cash or units, subject to unitholder approval.

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

And you could join the following to support my work:

Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

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REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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