Digital Core REIT - Stable DPU and improved income visibility

By Goh Lay Peng • 05 Feb 2026

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Digital Core REIT reported stabe DPU at 1.80 cents in 2H FY2025. For the fulll year FY2025, DPU was maintained at 3.60 cents, unchanged year-on-year.

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Stable distribution per unit with improved income visbility

Distribution per unit was maintained at 1.80 cents in 2H 2025, unchanged from 2H 2024. Regardless of the challenges from vacated spaces for six months, the Trust was able to defend the distributable income with the sponsor’s strong support. The Trust was able to leverage on the sponsor’s network for accretive acquisitions, customers and global relationships.

For the full year FY2025, DPU was maintained at 3.60 cents, unchanged year-on-year. FY2025 DPU at 3.60 cents translated to a distribution yield of 6.8% based on the closing price of US$0.53 as at 4 February 2026.

Including the contribution from newly acquired assets and the new tenant at Linton Hall, we estimate the distribution per unit to grow steadily in FY2026 and FY2027 to 3.65 cents and 3.76 cents, respectively.

*Source : Company data, Beansprout research*

Positive financial performance driven by accretive acquisition

Digital Core REIT reported 2% year-on-year increase in total property income to S$145.1 million in 2H25. Contributions from newly acquired properties and improved operating performance drove the set of positive results.

Revenue rose sharply by 61.6% year-on year to US$87.3 million in 2H25, led by robust leasing activities and positive rental reversion.

Net property income grew by 35.1% year-on-year to S$42.4 million in 2H25. Expansion in revenue and net property income were driven by the consolidation of the Frankfurt facility.

That said, the property expenses have increased due to the consolidation and higher utilities expenses. Net property income margin declined to 50.4% in FY2025, from 60.5% in FY2024.

Net property income grew by 35.1% year-on-year to S$42.4 million in 2H25. Through consolidating high quality assets and positive rent gains, the FFO yield has improved in FY2025.

Portfolio performance remains resilient

With focused asset management, the Trust has built a quality portfolio with high income visibility. Weighted average lease expiry (WALE) was relatively stable at 4.6 years at 31 December 2025, from 4.8 years as at 31 December 2024.

Committed portfolio occupancy was also unchanged at 97% as at 31 December 2025, compared to the previous year.

As at 31 December 2025, AUM grew by 12.5% year-on-year to US$1.83 billion or +3% year-on-year on a constant-currency basis.

The increase partly reflects the acquired 20% stake in Digital Osaka 3 and overall improvement in the leasing activities and market rents. In particular, the Trust lock-in higher renewal rent rates on the facilities in Los Angeles. In FY2025, the Trust achieved strong rental reversions of 31% in FY2025.

Updates on progress of Linton Hall

Linton Hall lease-up at 20% positive rental revision. After six months of downtime, the Trust successfully lease-up the space at 20% positive rental revision. The new lease is a 10-year contract with a global cloud service provider. It is expected to generate US$13.3 million in net property income, representing 15% of the Trust’s FY2025 net property income.

Currently undergoing a US$40 million redevelopment plan, the lease will commence on 1 December 2026.

Healthy balance sheet

Aggregate leverage increased to 37.1% as at 31 December 2025, from 34.0% as at 31 December 2024.

Cost of debt declined to 3.5% as at 31 December 2025, from 3.9% as at 31 December 2024.

The Trust strengthened its funding platform by setting up a euro medium-term note programme to gain access to public debt capital markets.

Maintain BUY and target price at US$0.63

Digital Core REIT is trading at US$0.53, implying FY25 distribution yield of 6.8%. Based on our estimates, Digital Core REIT is trading at FY2026E distribution yield of 6.9%.

In terms of PB ratio, Digital Core REIT is trading at a steep discount to its book value, at PB 0.73x. In comparison, Keppel DC REIT and NTT DC REIT are trading at PB 1.43x and 1.06x.

We remain positive that Digital Core REIT’s valuation will converge with the peer valuation with improved income visibility with progressive leasing of Linton Hall.

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