Revenue Grows by 9.8%, and Net Property Income Improves by 12.6% in H2 2024

Digital Core Real Estate Investment Trust (Digital Core Reit) has reported a 1.1% increase in its distribution per unit (DPU) to US$0.018 for the six months ending December 31, 2024. This marks an improvement from the same period last year. During this period, the data centre-focused trust achieved a revenue of US$54 million, representing a 9.8% year-on-year increase. Net property income (NPI) rose by 12.6%, reaching US$31.4 million.

Distributable income to unitholders also showed notable growth, up by 17% to US$23.4 million.

A significant contributor to the rise in revenue was the straight-line rent adjustments due to a customer bankruptcy in the second half of 2023. Cyxtera Technologies, a global leader in co-location and interconnection services, filed for bankruptcy protection in June 2023. In response to this, Digital Core Reit entered a deal with Brookfield Infrastructure Partners, agreeing to divest part of its Silicon Valley assets for US$160 million. While rental income from this divestment saw a decrease, the impact was offset by an increase in co-location income from the trust’s two Los Angeles assets—015 Winona and 200 North Nash—and additional earnings from its Frankfurt facility, which became a subsidiary in December 2024.

Finance income experienced a 66.2% growth, reaching US$5 million, up from US$3 million in the same period the previous year, largely due to increased fixed deposits with banks.

In terms of property valuation, the Reit achieved a net fair-value gain of US$251.6 million, reversing a loss of US$139.2 million during the previous corresponding period. This positive shift was mainly driven by an 11% gain of US$135.7 million from its North American portfolio, benefiting from favourable market conditions and the execution of new and extended leases.

For the full financial year 2024, Digital Core Reit recorded a decline in DPU by 2.7%, with the figure standing at US$0.036. The trust’s revenue for FY2024 was slightly down by 0.3% to US$102.3 million, while NPI decreased by 1.9% to US$61.8 million.

As of December 31, 2024, the trust’s assets under management totalled US$1.6 billion, primarily located in core data centre markets across the United States, Canada, Germany, and Japan. Annualised rental revenue from new and renewed leases amounted to US$74 million, with a cash rental rate reversion on renewed leases of 4.3%. Portfolio occupancy was reported at 96.7%, with the weighted average lease expiration standing at 4.8 years.

Units of Digital Core Reit saw a 1% increase, closing at US$0.515, just before the announcement of the results.