- Digital Core REIT (SGX:DCRU) posted a steady 1Q26, with flat distributable income (both y-o-y and q-o-q) despite the absence of income from Linton Hall since 2H25. This was attributed to the additional contribution from acquisitions, lower interest rates (~30bps savings y-o-y), and positive rental reversions.
- - Read this at SGinvestors.io -
Leasing momentum was encouraging.
- Leasing momentum was encouraging, with US$3.0mil of annualised rent signed at+44% cash rental reversion, while Linton Hall remains a meaningful embedded earnings catalyst ahead of its expected lease commencement in December 2026.
- - Read this at SGinvestors.io -
Our views.
- The near-term earnings outlook looks stable with the bulk of lease expiries in FY26 already renewed. We understand that the strong +44% reversions this quarter was mainly contributed by renewal of the Devin Shafron Drive master lease.
- While we expect rental reversions to remain positive, we understand that the pace of uplift in the coming quarters may moderate from the strong levels recorded this quarter. In the near term, the key re-rating catalyst is the commencement of the Linton Hall lease in December 2026.
- While Digital Core REIT had previously indicated its intention to pause share buybacks, it nonetheless undertook opportunistic repurchases during the quarter, delivering a ~0.3% DPU accretion.
Reiterate BUY.
- Read more at SGinvestors.io.
