Digital Core Reit to lose sole tenant at North Virginia data center property
Digital Core REIT disclosed on 2 January that its tenant at the 8217 Linton Hall property in Northern Virginia will not be exercising its lease renewal option.
The decision, confirmed on 31 December 2024, signals an impending departure of the building’s current occupant when the lease expires on 30 June 2025, said the REIT.
Digital Core REIT is a Singapore Exchange (SGX)-listed pure-play data centre REIT that owns a portfolio of 10 assets across North America, Germany and Japan.
8217 Linton Hall is one of three data centres it owns in North Virginia.
The property, wholly occupied by an undisclosed single tenant, accounted for approximately 11% of the REIT’s annualised rent as of 30 September 2024.
This impending departure has raised concerns about short-term disruptions to the REIT’s distribution per unit (DPU).
According to a figure provided by the REIT in its disclosure, each month of downtime at the asset could result in a 0.06-cent dip in DPU.
Despite this potential challenge, the REIT’s management remains optimistic about the property’s future prospects.
The REIT also highlighted opportunities to re-lease the building at market rates or redevelop parts of the 32-acre site to unlock long-term value.
This echoes a recent operational update, in which the REIT underscored the strategic benefits of maximising the site’s potential over short-term rental impacts.
The REIT has indicated that it will be keeping stakeholders informed as material developments arise with regards to the asset.
Digital Core REIT was last done on the SGX at USD0.58, which presently implies a distribution yield of 6.21% according to data on the Singapore REITs table.
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Digital Core Reit to lose sole tenant at North Virginia data center property, source
