NTT DC Reit first-half DPU exceeds IPO forecast by 10 per cent

NTT DC Real Estate Investment Trust reported first-half FY2026/27 distribution per unit of US$0.0432 on Nov 11, exceeding its IPO forecast of US$0.0393 by 10 per cent. Distributable income for the six months to Sep 30 reached US$45 million, compared with a US$40.9 million projection.

Gross revenue reached US$119.8 million, beating the forecast by 2 per cent, while net property income of US$55.8 million was 4.9 per cent above expectations. The Reit attributed the latter to higher tenant fit-out revenue, reduced real estate taxes and favourable currency movements. Net finance costs were US$10.4 million, 5.5 per cent below projection, mainly because of lower interest rates.

Occupancy measured by information technology load increased to 97.5 per cent at Sep 30 from 95.9 per cent three months earlier. Tenant expansions at the CA1 and CA3 facilities in California accounted for most of the improvement. Most leases began in September and are expected to generate a full quarter’s rental revenue from Q3 FY2026/27.

Committed occupancy, including signed leases that had not started, would reach 98.1 per cent. First-half rental reversion was 11.7 per cent, largely reflecting a 23 per cent reversion on the first-quarter renewal of the SG1 NTT Master Services Agreement.

Aggregate leverage declined from 31 per cent at end-June to 29.9 per cent at Sep 30, with total debt of US$528 million. The weighted average all-in interest rate fell to 3.8 per cent from 3.98 per cent. Fixed-rate borrowings accounted for 68.4 per cent of debt, with no loan maturities until FY2028/29.

Unitholders also approved a management fee revision on Nov 6. From FY2026/27, the performance fee will depend on year-on-year DPU growth rather than net property income.