The past few years have seen a sharp surge in people going online, while organisations are also embracing digitalisation.
This has led to an explosion in cloud computing firms as generative artificial intelligence and the Internet of Things become popular buzzwords.
With the surge in online activity, data is now the new oil and data centres have become essential infrastructure to keep up with this high demand.
The good news is that income investors can gain exposure to this fast-growing and lucrative sector through a selection of Singapore REITs.
Here are four data centre REITs boasting distribution yields of 4.4% or higher.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT with a portfolio of 25 data centres across 10 countries.
The REIT’s assets under management (AUM) totalled around S$5 billion as of 31 December 2024.
For 2024, Keppel DC REIT reported a 10.3% year-on-year increase in gross revenue to S$310.3 million, aided by positive rental reversions and rental escalations.
Net property income (NPI) increased by 6.3% year on year to S$260.3 million.
The data centre REIT’s distribution per unit (DPU) inched up 0.7% year on year to S$0.09451.
Shares of the REIT provide a trailing distribution yield of 4.4%.
Keppel DC REIT reported a high portfolio occupancy of 97.2% as of 31 December 2024 and the portfolio saw an impressive positive rental reversion of around 39% for 2024.
Management believes that data centres will continue to power the AI revolution.
The REIT divested Kelsterbach Data Centre last year for €50 million, at a premium to its valuation.
The proceeds will lower the aggregate leverage to 31.2% (from 31.5%) and give the REIT more financial flexibility for acquisitions.
Digital Core REIT (SGX: DCRU)
Digital Core REIT, or DCR, is a data centre REIT with a portfolio of 10 data centres.
DCR’s AUM stood at US$1.6 billion as of 31 December 2024.
The REIT reported a slightly downbeat set of earnings last year with revenue dipping 0.3% year on year to US$102.3 million.
NPI fell 1.9% year on year to US$61.8 million while DPU slid 2.7% year on year to US$0.036.
At a share price of US$0.515, DCR’s units offer a trailing distribution yield of 7%.
Despite the lower DPU, DCR maintained a high portfolio occupancy rate of 97% with 100% of its portfolio invested in freehold assets.
Just last week, the data centre REIT announced the acquisition of a 20% stake in a data centre located in Osaka, Japan, for around US$86.7 million.
Through this purchase, DCR hopes to increase its Asia-Pacific presence and improve the portfolio’s geographical diversification.
This acquisition is also expected to be DPU-accretive, adding 1.8% to DCR’s 2024 DPU to S$0.0367.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 56 properties in the US (including 13 data centres), 83 in Singapore, and two in Japan.
As of 31 December 2024, MIT’s AUM stood at S$9.2 billion.
For the third quarter of fiscal 2025 (3Q FY2025) ending 31 December 2024, MIT saw gross revenue inch up 2% year on year to S$177.3 million.
NPI improved by 2.6% year on year to S$133.2 million.
DPU crept up 1.5% year on year to S$0.0341.
MIT’s trailing 12-month DPU stood at S$0.1357, giving its units a trailing distribution yield of 6.5%.
Portfolio occupancy stood high at 92.1% and the industrial REIT enjoyed an average positive rental reversion rate of 9.8% for renewal leases.
Last year, the REIT acquired a 98.47% stake in a freehold property in Japan for around S$127.8 million.
This property can be potentially redeveloped into a new data centre that can create further value for unitholders.
CapitaLand India Trust (SGX: CY6U)
CapitaLand India Trust, or CLINT, is an Indian property trust with a portfolio of 10 IT business parks, three industrial facilities, one logistics park, and four data centre developments.
CLINT’s total AUM stood at S$3.7 billion as of 31 December 2024.
2024 saw an impressive performance by the India-based REIT.
Gross revenue rose 19% year on year to S$277.9 million while NPI increased by 14% year on year to S$205.6 million.
DPU climbed 6% year on year to S$0.0684.
At a unit price of S$0.965, CLINT’s shares offer a trailing distribution yield of 7.1%.
The REIT enjoyed a high committed occupancy rate of 95%.
CLINT’s data centres have a high stabilised net yield on cost of between 10.5% to 11%.
Based on current projections, the manager believes that data centre revenue should make up about a quarter of the REIT’s total gross revenue by 2028.
Assuming a 33% stake, CLINT will need to come up with another S$670 million of capital expenditure to develop these data centres.
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Disclosure: Royston Yang owns shares of Keppel DC REIT, Digital Core REIT and Mapletree Industrial Trust.
