NTT DC Reit targets $988 million in SGX’s biggest Reit IPO in a decade

SINGAPORE – Japan telecommunications giant Nippon Telegraph and Telephone (NTT) is set to raise US$773 million (S$988 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 US 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. The Reit is forecasting an annualised distribution yield of 7.5 per cent for the nine-month period from July 1, 2025, to March 31, 2026.

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.