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Independent Singapore
15-07-2025
- 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
CNA
14-07-2025
- 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.
Business Times
08-07-2025
- Business
- Business Times
‘No perfect timing': NTT DC Reit launches biggest S-Reit IPO in over a decade to raise US$773 million
[SINGAPORE] The manager of NTT DC Reit believes the timing is 'not perfect' for an initial public offering (IPO) as the market is still not stable. But it is powering ahead with the biggest IPO of a Singapore real estate investment trust (Reit) in over a decade, as it is in it for the long haul. 'If this is one time trial to squeeze money, maybe we don't take this IPO at this moment,' said Yutaka Torigoe, chief executive officer of the Reit manager, in a briefing on Monday (Jul 7). 'But this IPO is a continuous, sustainable development of our capital recycling system. This is a very long-term project for NTT Group, so we dare to start this project now.' The Reit manager on Monday launched its IPO, with NTT DC Reit listing over a billion units on the mainboard of the Singapore bourse to raise gross proceeds of US$773 million. There are nearly 600 million units on offer, comprising US$1 per unit for 569.9 million units in its international placement, and 30 million units at S$1.276 per unit for the Singapore public offer. Concurrent with, but separate from the offering, a group of cornerstone investors will subscribe to over 172 million units in total, representing 16.8 per cent of all units. These include GIC, which is subscribing to more than 100 million units that make up 9.8 per cent of the total units in issue after the offering. Immediately after the listing, GIC will be a substantial unit holder – becoming the second-largest investor in NTT DC Reit after its sponsor. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The other cornerstone investors are AM Squared, Ghisallo Master Fund, Hazelview Securities, Pinpoint Asset Management (Singapore), Viridian Asset Management and UBS (acting through its Singapore Branch, on behalf of wealth management customers). Separate from the offering, sponsor NTT Ltd will subscribe to over 257 million units, representing 25 per cent of all units. The Singapore public offer opens at 9 pm on Monday, and closes at 12 pm on Thursday. The counter is expected to start trading at 2 pm on Jul 14. Its forecast annualised distribution yield is 7.5 per cent for its 9M FY2025/2026 period (Jul 1, 2025 to Mar 31, 2026). The IPO portfolio has an appraised value of around US$1.6 billion, with a design infrastructure technology load of about 90.7 megawatts (MW). All assets in the portfolio are freehold, except for the Singapore asset, which is on leasehold land expiring in 2070. It comprises six carrier-neutral, Tier III or Tier III-equivalent assets with stringent operational and technical specifications that serve customers' high-value workloads, said the manager. The portfolio is diversified across Northern Virginia and Northern California in the US, Vienna in Austria and Singapore, with a mix of hyperscale and colocation customer contracts. Northern Virginia is the largest data centre market in the world, while Northern California is ranked eighth in the US. At the same time, Vienna is a fast-growing data centre market in the European region, and Singapore is the second-largest market in the Asia-Pacific. As at end-2024, the occupancy of the IPO portfolio stood at 94.3 per cent, with a weighted average lease expiry of 4.8 years. Hyperscale customers, comprising global cloud service providers and major international tech giants, make up 51 per cent of the portfolio's total monthly base rent as at Dec 31, 2024. The IPO portfolio also enjoys built-in organic growth from contractual escalations, with nearly three-quarters of contracts with fixed escalations of 3.3 per cent on average. The Reit manager said that there could also be potential earnings uplift from asset enhancement initiatives such as the implementation of improved cooling methods and the upgrading of integral mechanical, electrical and plumbing systems, which can help to improve operational efficiencies and lower operating costs. In the near term, assets comprising approximately 130 MW of the sponsor group's global data centre portfolio have been identified as high conviction potential acquisition targets for NTT DC Reit, for potential execution within the next five years. If acquired, these assets could potentially allow NTT DC Reit to double its size and capacity to over 200 MW. NTT DC Reit's aggregate leverage at IPO stands at 35 per cent. Some 70 per cent of its borrowings are on fixed rates or hedged-to-fixed rates via interest rate instruments, and it has no debt maturities in the next three years.
Straits Times
07-07-2025
- Business
- Straits Times
NTT DC Reit targets $937 million in SGX's biggest Reit IPO in a decade
Sign up now: Get ST's newsletters delivered to your inbox SINGAPORE – Japan telecoms giant Nippon Telegraph and Telephone (NTT) is set to raise US$773 million (S$937 million) from the initial public offering (IPO) of its data centre real estate investment trust (Reit), marking the largest Reit listing on the Singapore Exchange (SGX) mainboard in a decade. NTT DC Reit will include six data centres across Singapore, Austria and the United States with a total appraised value of US$1.57 billion in its portfolio. The NTT Group is one of the largest data centre providers in the world with total assets of approximately US$201 billion. NTT DC Reit's offering will comprise 599.89 million units, or just over 58 per cent, priced at US$1 per unit. This includes an international placement of 569.89 million units to institutional and overseas investors, and another 30 million publicly offered units in Singapore at $1.276 each. In addition to the public offering, seven investors have committed to buying 172.77 million cornerstone units, representing 16.8 per cent of the offering. They include Pinpoint Asset Management, UBS Singapore, Viridian Asset Management and Singapore's sovereign wealth fund GIC. GIC will purchase 100.88 million of the units available for the cornerstone investors, making it a substantial unit holder immediately upon listing with a 9.8 per cent stake. Separate from the offering, sponsor NTT has also agreed to subscribe for an additional 257.55 million units or 25 per cent of the total offering. In total, NTT DC Reit's offering will comprise around 1.03 billion units. Units of the Reit are slated to commence trading on the mainboard at 2pm on July 14. Mr Yutaka Torigoe, chief executive officer of NTT DC Reit Manager, said the company chose Singapore for its listing after also considering Japan and the US because it has an established Reit market that is welcoming to global asset portfolios. He added that the company plans to use the capital raised to further develop new data centre assets in its portfolio. NTT DC Reit is the third data centre Reit to list in Singapore, after Keppel DC Reit and Digital Core Reit. Prior to its launch on July 7, Manulife US – the first pure-play US office Reit in Asia – was SGX's largest Reit listing at US$519 million when it launched in 2016. United Hampshire, a US portfolio focusing on grocery-anchored shopping centres and self-storage facilities, was valued at US$599 million when it launched its Reit IPO in 2020. NTT DC's listing also comes at a time when SGX is beginning to see greater interest from investors and firms keen to list here after a sluggish first half in 2025. Local software firm Info-Tech Systems saw a successful debut on the mainboard on July 4, closing its first day of trading at 91 cents before retreating to 88 cents, just 1 per cent above its IPO price, on July 7. Other listings currently in the pipeline include Lum Chang Creations, Dezign Format and China Medical System. The global data centre market is expected to double in size by 2032, hitting an estimated value of US$584.8 billion. Despite its small geographical size, Singapore has ambitions to be a key player in this sector as part of its digital transformation plans. Power and land availability constraints have led to demand outpacing supply, resulting in a decline in data centre vacancies. According to NTT DC Reit, its Singapore facility in Serangoon has an occupancy rate of 90 per cent as of last year. Mr Masayuki Ozaki, chief financial officer of NTT DC Reit Manager, said: 'Singapore continues to be an attractive data centre market given its strong connectivity, central location, and huge relevance to the global and regional data traffic flow.' It is estimated that the growth of new green data centres in Singapore could cost as much as $10 billion to $12 billion.
Business Times
07-07-2025
- Business
- Business Times
‘Not perfect timing': NTT DC Reit launches biggest S-Reit IPO in over a decade to raise US$773 million
[SINGAPORE] The manager of NTT DC Reit believes the timing is 'not perfect' for an initial public offering (IPO) as the market is still not stable. But it is powering ahead with the biggest IPO of a Singapore real estate investment trust (Reit) in over a decade, as it is in it for the long haul. 'If this is one time trial to squeeze money, maybe we don't take this IPO at this moment,' said Yutaka Torigoe, chief executive officer of the Reit manager, in a briefing on Monday (Jul 7). 'But this IPO is a continuous, sustainable development of our capital recycling system. This is a very long-term project for NTT Group, so we dare to start this project now.' The Reit manager on Monday launched its IPO, with NTT DC Reit listing over a billion units on the mainboard of the Singapore bourse to raise gross proceeds of US$773 million. There are nearly 600 million units on offer, comprising US$1 per unit for 569.9 million units in its international placement, and 30 million units at S$1.276 per unit for the Singapore public offer. Concurrent with, but separate from the offering, a group of cornerstone investors will subscribe to over 172 million units in total, representing 16.8 per cent of all units. These include GIC, which is subscribing to more than 100 million units that make up 9.8 per cent of the total units in issue after the offering. Immediately after the listing, GIC will be a substantial unit holder – becoming the second-largest investor in NTT DC Reit after its sponsor. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up The other cornerstone investors are AM Squared, Ghisallo Master Fund, Hazelview Securities, Pinpoint Asset Management (Singapore), Viridian Asset Management and UBS (acting through its Singapore Branch, on behalf of wealth management customers). Separate from the offering, sponsor NTT Ltd will subscribe to over 257 million units, representing 25 per cent of all units. The Singapore public offer opens at 9 pm on Monday, and closes at 12 pm on Thursday. The counter is expected to start trading at 2 pm on Jul 14. Its forecast annualised distribution yield is 7.5 per cent for its 9M FY2025/2026 period (Jul 1, 2025 to Mar 31, 2026). The IPO portfolio has an appraised value of around US$1.6 billion, with a design infrastructure technology load of about 90.7 megawatts (MW). All assets in the portfolio are freehold, except for the Singapore asset, which is on leasehold land expiring in 2070. It comprises six carrier-neutral, Tier III or Tier III-equivalent assets with stringent operational and technical specifications that serve customers' high-value workloads, said the manager. The portfolio is diversified across Northern Virginia and Northern California in the US, Vienna in Austria and Singapore, with a mix of hyperscale and colocation customer contracts. Northern Virginia is the largest data centre market in the world, while Northern California is ranked eighth in the US. At the same time, Vienna is a fast-growing data centre market in the European region, and Singapore is the second-largest market in the Asia-Pacific. As at end-2024, the occupancy of the IPO portfolio stood at 94.3 per cent, with a weighted average lease expiry of 4.8 years. Hyperscale customers, comprising global cloud service providers and major international tech giants, make up 51 per cent of the portfolio's total monthly base rent as at Dec 31, 2024. The IPO portfolio also enjoys built-in organic growth from contractual escalations, with nearly three-quarters of contracts with fixed escalations of 3.3 per cent on average. The Reit manager said that there could also be potential earnings uplift from asset enhancement initiatives such as the implementation of improved cooling methods and the upgrading of integral mechanical, electrical and plumbing systems, which can help to improve operational efficiencies and lower operating costs. In the near term, assets comprising approximately 130 MW of the sponsor group's global data centre portfolio have been identified as high conviction potential acquisition targets for NTT DC Reit, for potential execution within the next five years. If acquired, these assets could potentially allow NTT DC Reit to double its size and capacity to over 200 MW. NTT DC Reit's aggregate leverage at IPO stands at 35 per cent. Some 70 per cent of its borrowings are on fixed rates or hedged-to-fixed rates via interest rate instruments, and it has no debt maturities in the next three years.
