NTT DC Reit IPO on Jul 14 broadens AI-related opportunities on SGX

[singapore] NTT DC Reit’s mega listing, which marks one of Asia’s largest data centre Reit initial public offerings (IPOs), broadens the opportunities for investors to gain exposure to assets driving the artificial intelligence (AI) boom.

Scheduled to commence trading at 2 pm on Jul 14, the Reit has an IPO market capitalisation of US$1 billion, and it will be the third pure-play data centre real estate investment trust (Reit) that is listed in Singapore.

It joins Digital Core Reit, which listed in Dec 2021, and Keppel DC Reit (Keppel DC), which rejoined the Straits Times Index (STI) last month. In total, the pure-play data centre S-Reits listed on SGX provide investors with exposure to around S$9 billion of global data centre assets. 

NTT DC REIT’s portfolio comprises six data centres – four in the US, one in Austria and one in Singapore – with an aggregate appraised value of US$1.6 billion.   

The portfolio has a design IT load of around 90.7 megawatts (MW) and is around 94.3 per cent occupied as at Dec 2024. It has an even mix of hyperscale and colocation customers and a weighted average lease expiry of 4.8 years. 

The Reit’s sponsor is part of the NTT Group, which is the third-largest data centre provider globally (excluding China).

NTT DC Reit noted in its prospectus that the global data centre market has demonstrated high growth, with commissioned power growing from 18.2 gigawatts (GW) in 2020 to 49.1GW in 2024, representing a compound annual growth rate of 28.1 per cent, and estimates are for it to continue growing at double-digit pace until 2027.

Some of the factors driving the demand for data centres include the proliferation of cloud solutions, as well as the rapid emergence of AI and generative AI in recent years. 

Based on the offer price of US$1 per unit, NTT DC Reit is projected to have an annualised distribution yield of 7.5 per cent for 9M FY2026, which is higher than the trailing distribution yields of other data centre S-Reits.

The largest pure-play data centre Reit in Singapore is Keppel DC, which has S$4.9 billion in assets under management (AUM), with 24 data centres across 10 countries. Keppel DC’s gross revenue grew 22.6 per cent on year to S$102.2 million in Q1 2025, while distribution per unit (DPU) increased by 14.2 per cent, driven by acquisitions and also due to higher contributions from contract renewals and escalations in 2024.

Digital Core Reit, meanwhile, manages US$1.7 billion in assets across 11 data centres. The Reit’s revenue rose 79.9 per cent to US$44.2 million in Q1 2025, while distributable income climbed 9.9 per cent to US$11.7 million. 

Elsewhere, Mapletree Industrial Trust reported in April a 1 per cent year-on-year increase in DPU for FY2025 to S$0.1357. Net property income rose 2 per cent over the period, primarily due to higher contributions from Osaka Data Centre and a newly acquired mixed-use facility in Tokyo, as well as new leases and renewals across various Singapore properties.

The industrial Reit has around 56 per cent of its S$9.1 billion AUM belonging to data centres.

Other S-Reits that maintain some exposure to data centres include CapitaLand Ascendas Reit, which announced in May the proposed acquisition of a data centre property in Singapore that would raise its data centre AUM to S$1.9 billion.

CapitaLand India Trust also has several data centres under development, and expects the data centre portfolio to contribute at least 25 per cent of the trust’s revenue by 2028. 

Last month, Stoneweg Europe Stapled Trust also announced that it has made a 50 million euro (S$74.8 million) investment in a fund that holds interests in early-stage data centre development sites, located in Ireland, Denmark, Spain, Italy and the UK. SGX RESEARCH

The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the S-Reits & Property Trusts Chartbook.