Digital Core REIT 1Q 2026: Flat DPI of US$11.7M Masks Compositional Shift; Linton Hall Now Redevelopment (+35% Rent Uplift Dec 2026); Osaka Minority Stakes +95% YoY; Peer Set Adds NTT DC REIT

Digital Core REIT 1Q 2026 (quarter ended 31 March 2026) delivered revenue of US$44.1M (-0.2% YoY), Net Property Income of US$21.3M (-4.9% YoY), and distributable income of US$11.7M (flat YoY) — but the flat distributable income is the smaller story. The larger story is that the quarter executes a visible compositional shift: Linton Hall's move out of the in-service portfolio into redevelopment, Osaka minority-stake contribution nearly doubling, and a peer-relative setup that has re-anchored against a pure-play data centre comp set for the first time since IPO. Six insights beyond the headline.

Revenue US$44.1M (1Q25: US$44.2M; -0.2% YoY). NPI US$21.3M (1Q25: US$22.4M; -4.9%). Cash NPI US$20.8M (1Q25: US$22.4M; -6.9%). Share of Result of Associates US$1.83M (1Q25: US$0.94M; +94.8%). Finance Expenses US$6.9M (1Q25: US$6.5M; +7.0%). Profit for the Period US$8.7M (1Q25: US$5.4M; +61.9%). Distributable Income US$11.7M (1Q25: US$11.7M; flat). NAV per unit US$0.79 (Dec-25: US$0.80; -1.3%). Unit price at reporting date US$0.485 (Dec-25: US$0.510; -4.9%). Aggregate leverage 39.0% (Dec-25 data, +100bps YoY from 38.0%). Weighted Average Cost of Debt 3.5% (1Q25: 3.8%; -30bps). Weighted Average Debt Maturity 3.5 years (1Q25: 4.5 years). Fixed-rate debt 80% (1Q25: 85%). Interest Coverage Ratio 3.3x (1Q25: 3.7x). AUM US$1.8Bn (1Q25: US$1.7Bn). 11 data centres across six metros. Portfolio (all-in) occupancy 97.6%, in-service 97.1%. Weighted Average Lease Expiry 4.4 years on in-service basis, 5.3 years all-in.

Revenue and Net Property Income both softened year-on-year at the in-service portfolio — revenue -0.2% and NPI -4.9% — yet distributable income came in identical to 1Q 2025 at US$11.7M. The bridge is not one line, it is three. First, share of result of associates nearly doubled to US$1.83M from US$0.94M — a +94.8% YoY uplift driven by Osaka 2 and Osaka 3 operating at full contribution. Second, unrealised foreign exchange moved from a US$4.4M loss in 1Q 2025 to essentially nil in 1Q 2026, removing a major drag on net profit that had flowed through to distribution adjustments. Third, the distribution adjustments line itself declined to US$6.3M from US$9.6M, reflecting fewer non-cash items needing add-back. The operating portfolio is running slightly softer; Osaka minority stakes, FX normalisation and distribution-level engineering closed the gap. This is healthy mechanics rather than earnings erosion, but it means the flat DPI disguises rather than reflects underlying stability.

In the 1Q 2025 deck, 8217 Linton Hall Road appeared in the main portfolio table at 100% occupancy, WALE 0.2 years, annualised rent US$9.86M — active and rolling. In the 1Q 2026 deck, the asset has been removed from the in-service portfolio and classified under Redevelopment, with pro forma annualised rent of US$18.08M commencing 1 December 2026 and WALE of 10.0 years. This is the January 2026 lease-up flagged in the FY2025 Annual Report — the +35% rent uplift on approximately 13% additional sellable capacity from the refurbishment. The 1Q 2026 portfolio disclosure splits totals cleanly for the first time: in-service US$1.60Bn at 97.1% occupancy with WALE 4.4 years, versus all-in US$1.83Bn at 97.6% with WALE 5.3 years. The 90-basis-point occupancy difference and the 90-basis-point WALE lift both come from one asset. 8217 Linton Hall is not in the 2026 run-rate; it is the single biggest variable in the 2027 run-rate.

The 1Q 2025 deck reported cash rental reversion of +183% on US$3.0M of annualised rent signed that quarter, concentrated in a single revert-to-market leasing event. The 1Q 2026 deck reports +44% cash rental reversion on US$3.0M of annualised rent — same scale, different signature. The manager describes activity this quarter as "broad-based" across Northern Virginia, Osaka, Los Angeles, Frankfurt and Toronto. A +183% single-contract print is not repeatable; a +44% print distributed across five markets at the same rent scale is closer to a run-rate signal. Embedded mark-to-market is now converting into the portfolio through normal lease cycle, which is more durable than a one-off and more sustainable in its contribution to rental growth over the next eight quarters.

The share of result of associates line in 1Q 2026 printed US$1.83M versus US$0.94M in 1Q 2025 — a +94.8% year-on-year increase. This is the contribution from Digital Osaka 2 (KIX11) and Digital Osaka 3 (KIX12), both held at a 20% interest. Annualised, the associate contribution runs at approximately US$7.3M, against total portfolio annualised rent of US$101.3M on an in-service basis — roughly 7.2% of the cash earnings on a minority stake interest. At the 1Q 2025 print the same stakes were contributing only US$3.8M annualised, or 3.5% of portfolio rent. Osaka 3 at 1Q 2025 had only just completed; Osaka 2 was still ramping. One year later, both are at or near full contribution, and the capital-efficiency of Japan minority stakes as a scaling vehicle is validated. Expansion along this template — 20% interests on sponsor-operated Japanese assets — is a cheaper path to portfolio growth than equity-funded majority acquisitions elsewhere.

The 1Q 2025 peer valuation comparison placed Digital Core REIT against Keppel DC REIT, Mapletree Industrial Trust and CapitaLand Ascendas REIT — one owner-operator data centre peer against two hybrid asset managers. The 1Q 2026 peer table now includes NTT DC REIT, which listed on SGX in 2H 2025. NTT DC REIT is 100% data centre, 83% freehold, 32.5% geared, trading at zero premium-discount to NAV with an 8.0% DPU yield. Digital Core REIT is 100% data centre, 100% freehold, 39.0% geared, trading at 35% discount to NAV with a 6.9% DPU yield. The Singapore-listed pure-play data centre REIT universe has doubled overnight, and the like-for-like benchmark for Digital Core REIT is now another owner-operator structure rather than a hybrid asset-manager structure. Meanwhile Keppel DC REIT has re-rated to a 40% premium to NAV from a 34% premium a year ago, expanding the premium-discount gap versus Digital Core REIT from 73 percentage points to 75 percentage points. On one read, the Digital Core REIT discount has tightened 400 basis points year-on-year from 39% to 35% — improving. On the harder read, the gap to the highest-quality pure-play peer is at a post-IPO extreme.

Weighted average debt maturity compressed from 4.5 years at 1Q 2025 to 3.5 years at 1Q 2026 — one year of passage, one year of runway lost, no recast repeated at 2024's scale. Fixed-rate debt share declined from 85% to 80%. Interest coverage ratio eased from 3.7x to 3.3x. Management's own sensitivity disclosure shows that a 10% EBITDA decline would take ICR to 3.0x, while a 100 basis point rise in interest rates would take ICR to 2.5x — still comfortably above any covenant, but the margin of safety has thinned. The US$2029 maturity wall is material at US$422M aggregate across term loan, private placement and the undrawn revolver. The US$750M Medium Term Note programme established in 1Q 2025 remains untapped. Deploying it to refinance into longer tenor would restore the maturity profile to something closer to the 1Q 2025 baseline. Management has flagged credit facility extension options that could push 2029 maturities by twelve months into 2030, but both the MTN issuance and the facility extension are latent moves rather than completed ones. The 1Q 2026 print exposes the balance-sheet tenor question more openly than any prior quarter.

Unit price at reporting date of US$0.485 is 8.5% below the US$0.530 print at 1Q 2025, against NAV per unit that moved from US$0.78 to US$0.79 — the (35%) discount reflects market pricing of Linton Hall execution risk and balance-sheet tenor compression rather than operational deterioration. The DPU yield at 6.9% sits between NTT DC REIT's 8.0% and Mapletree Industrial's 5.9%, with Keppel DC REIT at 4.4% on its premium rerating. The 7.1 million-unit buyback at an average price of US$0.486 in 1Q 2026 — approximately four times the 1.8 million-unit buyback volume in 1Q 2025 at an average of US$0.565 — is the manager's own read on the setup: operational recovery priced with caution, Linton Hall reversion catalyst priced at a discount. Debt headroom to the 50% leverage ceiling stands at US$428M, providing capacity for further accretive investment activity without equity issuance. The catalyst path into 2027 is concrete: Linton Hall rent commencement 1 December 2026 at +35% NPI uplift; full-year Osaka 3 contribution beyond the first-year ramp; potential MTN programme activation to extend debt tenor.

The 1Q 2026 print is a quarter of compositional change dressed as a flat distributable income. Three forward catalysts define the read through 2026 and into 2027. First, Linton Hall lease commencement on 1 December 2026 — contractual, not speculative — brings US$8.2M of annualised rent back into service at +35% to the prior rate, on an asset previously worth 9% of the in-service portfolio's annualised rent. Second, Osaka minority-stake contribution has doubled year-on-year at the associate line, validating the 20% Japan template as a capital-efficient growth vehicle. Third, balance-sheet tenor is the one genuine caution — the MTN programme set up in 1Q 2025 remains the unused release valve for the 2029 maturity wall. The valuation setup against a pure-play peer group now including NTT DC REIT, and against Keppel DC REIT's 40% premium rerating, positions Digital Core REIT as the sector's largest valuation gap at the point where its largest asset catalyst is nine months from commencement.