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Independent Singapore
13 hours ago
- Business
- Independent Singapore
GIC-backed NTT DC REIT positions Singapore as ‘regional hub for AI-related investment opportunities' despite muted trading debut, analyst says
SINGAPORE: The Nippon Telegraph and Telephone Data Centre Real Estate Investment Trust (NTT DC REIT), backed by Singapore's sovereign wealth fund GIC and Japan's NTT Group, raised US$773 million (S$990.9 million) in its initial public offering (IPO), marking the largest listing on the Singapore Exchange (SGX) since 2017. While the IPO was oversubscribed, its first day of trading on Monday (Jul 15) was muted, and analysts were less impressed. Still, CMC Markets sales trader Oriano Lizza said the listing would help strategically position Singapore as a 'regional hub for AI-related investment opportunities,' as reported by Channel News Asia ( CNA ). On Monday, the REIT began trading on SGX at 2 p.m., opening at US$1.02 (S$1.31) — slightly above its offer price of US$1. It rose to a high of US$1.03 during the session but ended the day back at US$1. Mr Yutaka Torigoe, CEO of the REIT's manager, said he was heartened by what he called an 'excellent debut,' noting it reflected investor confidence in the REIT's portfolio quality, its growth prospects, and the overall outlook for data centres around the world. See also GIC is now 3rd most powerful asset owner in the world However, Jonathan Koh, director of research at UOB Kay Hian, said they had hoped the unit price would reach US$1.10, but the market reaction was more muted than anticipated. He noted that investors could be holding back due to ongoing trade tensions and the threat of higher tariffs, which have added to business uncertainty. Mr Lizza, who described the share price move as 'notably measured rather than exuberant,' added that 'while the IPO was 4.6 times oversubscribed overall and the public offer was 9.8 times oversubscribed, the tepid price performance actually demonstrates mature investor behaviour.' He said the price movement suggests institutional discipline rather than retail speculation, noting that long-term holder GIC holds a 9.8% stake. Mr Lizza also highlighted the current elevated interest rate environment, which typically weighs on REIT valuations, adding that investors are 'appropriately pricing in execution risk,' given NTT DC REIT's portfolio, which spans three continents. According to the IPO prospectus, the NTT Group is the world's third-largest data centre operator through its global business arm, NTT Global Data Centers (NTT GDC). On Monday, when asked why the company chose Singapore over Tokyo, Doug Adams, President and CEO of NTT GDC, told CNBC's Squawk Box Asia: 'The Singapore market is a great market for data centres in general, and we believe the best market in the world for data centre REITs. What makes Singapore unique is the fact that Singapore appreciates global portfolios of data centres.' /TISG Read also: Former Senior Minister Teo Chee Hean to step down from GIC's board on June 30 after announcement of joining Temasek Featured image by Depositphotos
Time of India
a day ago
- Business
- Time of India
Data centre focused REIT debuts in Singapore, biggest in years
A real estate investment trust (REIT) focused on data centres made a lukewarm debut on the Singapore exchange Monday, in the city-state's biggest listing in eight years. Valued at US$773 million, the trust NTT DC REIT is backed by the city's sovereign wealth fund and Japan's NTT group . It is expected to give a much-needed boost to the Singapore Exchange (SGX), which has seen lacklustre interest for major listings in recent years. Data centres are an area of phenomenal growth owing to the global need to store massive amounts of digital data and run energy-intensive artificial intelligence tools. NTT DC REIT closed at its offer price of $1.0 per unit on the SGX, after opening at $1.02 and rising to as much as 1.03 after trading began at 2pm (0600GMT). It was the biggest listing on the exchange since 2017, when fiber network-centred NetLink NBN Trust raised Sg$2.3 billion (US$1.8 billion). NTT DC REIT is backed by Singapore's GIC, one of the world's biggest sovereign wealth funds, and Japan's telecommunications giant NTT Group. The NTT Group, through its global data center business NTT GDC, is the world's third-largest data centre provider, according to the IPO's prospectus. It has a portfolio of six data centres in Singapore, Austria and the United States valued at $1.6 billion. Singapore is a leading hub for data centres in Asia, with its strategic location at the crossroads of submarine cable routes providing connectivity to the region and beyond. From 2024 to 2027, the power used by data centres is expected to rise at a compounded annual growth rate of 27.5 percent, following double-digit expansion over the past five years, the prospectus said. Song Seng Wun, economic advisor at financial services firm CGS International Singapore, said the offer allows investors to ride on the artificial intelligence (AI) boom to diversify their assets. "Demand for data centres is a straightforward proposition because of the demand generated by AI and everyday use of technology," said Song. It is a "less risky investment" compared to assets that are more vulnerable to geopolitical developments and the changing tariff landscape, he told AFP. The listing is also a "feather in the cap of SGX which has been playing second fiddle to Hongkong for a while now," he said.
CNA
2 days ago
- Business
- CNA
Singapore's largest IPO since 2017 sees muted debut
SINGAPORE: Despite its initial public offering (IPO) being oversubscribed, market reaction to a data centre-focused real estate investment trust (REIT) that was billed as the largest to debut on the Singapore bourse since 2017 was muted on the first day of trade. The NTT DC REIT, which started trading on the Singapore Exchange (SGX) at 2pm on Monday (Jul 14), opened at US$1.02, above its offer price of US$1. During the afternoon, the REIT's share price rose as high as US$1.03, before closing at US$1. The trust raised a total of US$773 million and is backed by Singapore's sovereign wealth fund GIC and Japan's telecommunications giant NTT Group. It is the biggest listing on the exchange since 2017, when fibre network-centred NetLink NBN Trust raised S$2.3 billion (US$1.8 billion). NTT Group is the world's third-largest data centre provider through its global data centre business NTT GDC, according to the IPO's prospectus. Mr Yutaka Torigoe, chief executive officer of the manager of NTT DC REIT, said he was encouraged by the "excellent debut" and said it underscores confidence in the quality of the REIT's portfolio, its growth prospects and the outlook for data centres globally. However, analysts were less impressed by the trading performance. "We were hopeful that unit price should hit US$1.10 but the market reaction is much more muted than we anticipated," said Mr Jonathan Koh, a director of research at UOB Kay Hian. He said investors may be holding back their optimism because of the ongoing trade tensions and threats of higher reciprocal tariffs that have led to business uncertainty. Mr Oriano Lizza, a sales trader at CMC Markets, described the share price moves as "notably measured rather than exuberant", but said he viewed it positively. "While the IPO was 4.6 times oversubscribed overall and the public offer was 9.8 times oversubscribed, the tepid price performance actually demonstrates mature investor behaviour," he said. He said the price action suggests institutional discipline rather than retail speculation, noting that GIC holds a 9.8 per cent stake, and is a long-term holder rather than a short-term trader. Mr Lizza also pointed to the current interest rate environment being elevated, which traditionally pressures REIT valuations. He added that investors are "appropriately pricing in execution risk" given that the portfolio of NTT DC REIT spans three continents. "The measured but positive reception demonstrates that Singapore's capital markets are evolving toward greater maturity and sustainability, focusing on long-term value creation – a positive development for the broader market ecosystem," he said. "BREATH OF FRESH AIR" Analysts also said that the successful listing of NTT DC REIT holds significance, in particular because of the size of the listing and the business being focused on data centres. UOB Kay Hian's Mr Koh said the listing signifies a resumption of large-cap companies going public on the SGX. The interest in the listing shows that investors are keen to invest in REITs with a good sponsor and that data centres remain a sought-after asset class, he said. The IPO raised publicity for Singapore REITs since it was the largest REIT listing on the SGX mainboard in a decade, said Mr Jayden Vantarakis, head of ASEAN equity research at Macquarie Capital. "As such, NTT DC REIT brings a breath of fresh air to the space," he said. The listing will likely elevate Singapore REITs and the SGX if it does well, given that there are limited pure data centre-focused REITs in Asia, he added. Mr Lizza said the listing represents a "watershed moment" for Singapore's capital markets. "Beyond the impressive scale, this listing strategically positions Singapore as a regional hub for AI-related investment opportunities," he said. NTT DC REIT provides investors direct exposure to critical digital infrastructure that is powering artificial intelligence and cloud computing growth, he said. SGX Group's head of global sales and origination Pol de Win said the listing taps into the immense growth potential of data centres, which is gaining strong investor interest globally. "As the first REIT by a global tech powerhouse like NTT, it underscores Singapore's position as Asia's leading REIT hub," he said. The outlook for the company appears fundamentally positive, Mr Lizza said, pointing to exceptional growth in the global data centre market. Locally, the government plans to add 300 megawatts of additional capacity, so the structural demand environment is robust, he said. He also said the IPO sends a "strong positive signal" about renewed confidence in Singapore's capital markets, which the government is trying to revive. The quality of the transaction demonstrates that Singapore can attract premium international assets, and should give a boost of confidence to other potential SGX listings, said Mr Lizza. "The combination of government support measures, improved market infrastructure, and this successful large-scale listing creates a more favourable environment for companies considering SGX as their listing destination," he said. He sees a broad base of potential REIT IPOs on the horizon, including data centre, industrial, logistics, hospitality, commercial and retail assets that could raise between S$600 million to around S$1 billion, he said.
Khaleej Times
2 days ago
- Business
- Khaleej Times
Data centre focused REIT debuts in Singapore, biggest in years
A real estate investment trust (REIT) focused on data centres made a lukewarm debut on the Singapore exchange on Monday, in the city-state's biggest listing in eight years. Valued at $773 million, the trust NTT DC REIT is backed by the city's sovereign wealth fund and Japan's NTT group. It is expected to give a much-needed boost to the Singapore Exchange (SGX), which has seen lacklustre interest for major listings in recent years. Data centres are an area of phenomenal growth owing to the global need to store massive amounts of digital data and run energy-intensive artificial intelligence tools. NTT DC REIT closed at its offer price of $1.0 per unit on the SGX, after opening at $1.02 and rising to as much as 1.03 after trading began at 2pm (0600GMT). It was the biggest listing on the exchange since 2017, when fiber network-centred NetLink NBN Trust raised S$2.3 billion ($1.8 billion). NTT DC REIT is backed by Singapore's GIC, one of the world's biggest sovereign wealth funds, and Japan's telecommunications giant NTT Group. The NTT Group, through its global data center business NTT GDC, is the world's third-largest data centre provider, according to the IPO's prospectus. It has a portfolio of six data centres in Singapore, Austria and the United States valued at $1.6 billion. Singapore is a leading hub for data centres in Asia, with its strategic location at the crossroads of submarine cable routes providing connectivity to the region and beyond. From 2024 to 2027, the power used by data centres is expected to rise at a compounded annual growth rate of 27.5 per cent, following double-digit expansion over the past five years, the prospectus said. Song Seng Wun, economic adviser at financial services firm CGS International Singapore, said the offer allows investors to ride on the artificial intelligence (AI) boom to diversify their assets. "Demand for data centres is a straightforward proposition because of the demand generated by AI and everyday use of technology," said Song. It is a "less risky investment" compared to assets that are more vulnerable to geopolitical developments and the changing tariff landscape, he told AFP. The listing is also a "feather in the cap of SGX which has been playing second fiddle to Hongkong for a while now," he said.
Malay Mail
2 days ago
- Business
- Malay Mail
Biggest data centre REIT listing in years hits Singapore exchange
SINGAPORE, July 14 — A real estate investment trust (REIT) focused on data centres made a lukewarm debut on the Singapore exchange today, in the city-state's biggest listing in eight years. Valued at US$773 million, the trust NTT DC REIT is backed by the city's sovereign wealth fund and Japan's NTT group. It is expected to give a much-needed boost to the Singapore Exchange (SGX), which has seen lacklustre interest for major listings in recent years. Data centres are an area of phenomenal growth owing to the global need to store massive amounts of digital data and run energy-intensive artificial intelligence tools. NTT DC REIT closed at its offer price of $1.0 per unit on the SGX, after opening at $1.02 and rising to as much as 1.03 after trading began at 2pm (0600GMT). It was the biggest listing on the exchange since 2017, when fiber network-centred NetLink NBN Trust raised Sg$2.3 billion (US$1.8 billion). NTT DC REIT is backed by Singapore's GIC, one of the world's biggest sovereign wealth funds, and Japan's telecommunications giant NTT Group. The NTT Group, through its global data center business NTT GDC, is the world's third-largest data centre provider, according to the IPO's prospectus. It has a portfolio of six data centres in Singapore, Austria and the United States valued at $1.6 billion. Singapore is a leading hub for data centres in Asia, with its strategic location at the crossroads of submarine cable routes providing connectivity to the region and beyond. From 2024 to 2027, the power used by data centres is expected to rise at a compounded annual growth rate of 27.5 percent, following double-digit expansion over the past five years, the prospectus said. Song Seng Wun, economic advisor at financial services firm CGS International Singapore, said the offer allows investors to ride on the artificial intelligence (AI) boom to diversify their assets. 'Demand for data centres is a straightforward proposition because of the demand generated by AI and everyday use of technology,' said Song. It is a 'less risky investment' compared to assets that are more vulnerable to geopolitical developments and the changing tariff landscape, he told AFP. The listing is also a 'feather in the cap of SGX which has been playing second fiddle to Hongkong for a while now,' he said. — AFP
