Digital Core REIT's 1H FY25 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue, net property income (NPI), and distributable income to unitholders posted strong year-on-year (YoY) growth, primarily driven by:

• Acquisition of an additional 15.1% stake in the Frankfurt data centre (Dec 2024)
• 20% interest in Digital Osaka 3 (Mar 2025)
• Higher rental and co-location income from the LA assets (3015 Winona & North Nash)
• Built-in rental escalations of 1–3% across leases

However, despite the strong topline growth, distributable income rose only slightly due to:

• Lower finance income
• Higher finance costs, management fees, and other trust expenses
• Partial offset from more management fees being paid in units

DPU remained stable YoY at 1.80 US cents.

Acquisition

In March 2025, Digital Core REIT completed its acquisition of a 20% interest in Digital Osaka 3.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Favorable
• REIT Manager's Shareholding: Favorable
• Directors of REIT Manager's Shareholding: Moderate

Lease Profile

• Occupancy: Favorable
• Highest Annual Lease Expiry in 4 Years: Favorable
• WALE: Moderate
• Weighted Average Land Lease Expiry: Favorable

Debt Profile

• Adjusted Interest Coverage Ratio: Favorable
• Cost of Debt: Moderate
• Gearing Ratio: Moderate
• Fixed Rate Debt Proportion: Favorable
• Unsecured Debt Proportion: Favorable
• Highest Annual Debt Maturity in 4 Years: Favorable
• WADM: Favorable

Diversification Profile

• Top Geographical Weightage: Favorable
• Top Property Weightage: Moderate
• Top 5 Properties' Weightage: Less Favorable
• Top Tenant Weightage: Moderate
• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Less Favorable
• Manager's Fees over Operating Distributable Income: Less Favorable
• Operating Distributable Income on Capital: Moderate
• Operating Distributable Income Margin: Less Favorable
• Operating Distribution Proportion: Less Favorable

DPU Breakdown

• TTM Distribution Breakdown:
• 82.6% from Operation
• 17.3% from Management Fees Paid in Units
• 0.1% being Retained

Trends (Up to 10 Years)

• Uptrend: Operating Distributable Income over Manager's Fees
• Slight Uptrend: None
• Flat: None
• Slight Downtrend: Committed Occupancy, Top 5 Properties' Weightage
• Downtrend: DPU from Operations, NAV per Unit, Adjusted Interest Coverage Ratio, Top 10 Tenants' Weightage, Property Yield, Operating Distributable Income on Capital, Operating Distributable Income Margin, Operating Distribution Proportion

Price Range & Relative Valuation Metrics

• Dividend Yield: Average for 1y, 3y & 5y
• P/NAV: Average for 1y, 3y & 5y

Author's Opinion

Compared to the previous half-year, revenue growth was mainly supported by recent acquisitions. NPI growth was moderated by higher property expenses, while distributable income and DPU remained flat. Notably, the lease for 8217 Linton Hall in Northern Virginia expired on 30 June 2025, with the tenant vacating on 1 July. This property accounts for approximately 9% of annualized rent, though no detailed update was provided in the results presentation. On the debt front, the REIT has no maturity until 2027.

For more information, check out:

S-REITs Dashboard - Detailed information on individual Singapore REIT

S-REITs Data - Overview and detail of Singapore REITs

S-REIT Comparison - Comparison among Singapore REITs

REIT Review - List of previous REIT review posts

To support my work, check out:

Patreon - Subscribe and get exclusive content

Investing Note - Support by following my Investing Note profile

Facebook Page - Support by liking my Facebook Page    

Facebook Group - Passive Income Investing Community - Join to share and discuss REITs

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

Buy Me a Coffee - Treat me a coffee for my efforts

*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.