Digital Core REIT - UOB Kay Hian 2025-01-08: Successful Backfilling At Toronto & Los Angeles Not Fully Appreciated

• Investors have overlooked a few positive developments Digital Core REIT announced during the festive season in Dec 24.

Increases stake in Frankfurt data centre from 49.9% to 65.0%.

• - Read this at SGinvestors.io -
• Geographically, data centres in Germany and Japan have expanded by 5ppt to 39% of annualised rent (Frankfurt: 32%, Osaka: 7%). The reliance on North America has correspondingly been reduced from 66% to 61%.

Frankfurt data centre close to full occupancy.

• - Read this at SGinvestors.io -
• Occupancy for the Frankfurt data centre improved 6.3ppt q-o-q to 98.5% in 2Q24 after signing several new leases. There is growth potential to lease-up the remaining vacant space of 1.5%.

Positive impact on DPU and NAV.

• The Frankfurt data centre generated NPI of €13.4m (US$14.7m) in 1H24. The additional stake provides an attractive NPI yield of 5.7%.
• The purchase consideration represents a discount of 17.8% to the latest valuation of US$628.7m. The acquisition is funded by a Euro-denominated term loan at an all-in cost of 3.6% and is estimated to be accretive to pro forma 2023 DPU by 3.1%.
• NAV per Digital Core REIT unit would increase 4.3% to US$0.72. Aggregate leverage would rise by 2.1ppt to 36.6%.

Completed backfilling of Toronto data centre.

• Read more at SGinvestors.io.

Above is an excerpt from a report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.

Read also UOB's most recent report:
2025-02-14 Digital Core REIT - Good Works That Withstood The Test Of Fire.

Price targets by other brokers at Digital Core REIT Target Prices.

Listing of research reports at Digital Core REIT Analyst Reports.

Relevant links:
Digital Core REIT Share Price History,
Digital Core REIT Announcements,
Digital Core REIT Dividend Payout Dates & Corporate Actions,
Digital Core REIT News