Digital Core REIT 2.0: The US$315M Restructuring Explained- Good or Bad?

Hi Folks, welcome back to Investment Income for Life. Today I am doing a short post on the latest major portfolio reshuffling by Digital Core REIT ("DCREIT"). I must say that I am totally baffled by this move. It is basically selling North America mature data centres back to its sponsor Digital Realty and then buying Japan and Singapore data centres from its sponsor using the sales proceeds. I thought that DC REIT should have actually kept the existing North America data centres in order to have stable cashflow and at the same time, do a rights issue to purchase the Osaka data centres and also Loyang Singapore data centre to boost the growth story. 

Transaction Overview:

While the portfolio restructuring is expected to be DPU accretive and reduced aggregate leverage ratio (from 39.2% to 36.3%), I do not like the Asia Pacific growth story that has been marketed. Why would the sponsor want to buy over properties that it deemed as already matured? Out of kindness to Singapore investor of DCREIT and to make less money for its own unit-holders?

Anyway, looking forward to the lifting of the trading halt to see whether the market believes in the current storyline being sold. Its last traded price is US$0.475 as at 11 August 2026.