Japanese telecommunications firm NTT plans to raise around US$864 million through the initial public offering (IPO) of its data center real estate investment trust (REIT) on the Singapore Exchange.

This amount includes an overallotment option, according to a term sheet that initiates the bookbuilding process.

The NTT DC REIT includes six data center assets located in the United States, Austria, and Singapore, as stated in its preliminary prospectus.

The base offering is valued between US$772 million and US$812 million, while the overallotment option could add an additional US$51.5 million.

If fully exercised, the overallotment option would leave NTT with a 20% stake in the REIT.

The REIT’s market capitalization is estimated to reach up to US$1.08 billion.

Bookbuilding is scheduled to conclude on July 4, 2025, with the listing anticipated for July 14.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Data center REITs demonstrate resilience amid growing digital infrastructure demand

NTT’s planned $864 million REIT IPO fits within a rapidly expanding market segment that’s gaining investor attention globally.

The global data center market is projected to grow from US$242.7 billion in 2024 to US$584.8 billion by 2032, representing a compound annual growth rate of 11.7% 1.

Existing data center REITs in Singapore have demonstrated strong performance metrics, with occupancy rates consistently above 90% and positive rental reversions indicating strong demand 2.

This asset class has proven attractive for its stability, as moving data centers can cost tenants between $10-20 million, creating a “sticky” tenant base that helps ensure steady revenue streams 3.

The growing adoption of AI technologies is further accelerating demand, with data center REITs like Keppel DC REIT specifically citing AI as a driver of future growth in their earnings outlooks 2.

2️⃣ Singapore’s market revitalization efforts bearing fruit with significant listings

NTT’s potential US$864 million IPO would be the largest on the Singapore Exchange since Digital Core REIT’s $977 million listing in 2021, signaling a potential turnaround for the market 1.

The listing comes after Singapore implemented comprehensive measures in February 2025 to strengthen its equities market, including tax rebates for new listings and an equity market development program 4.

These reforms were a direct response to a significant downturn in Singapore’s IPO activity, which saw only four listings in 2024 raising just $31 million total 5.

Singapore’s REIT sector has been a particular focus for development, with government incentives for REIT listings extended until 2030 to maintain the exchange’s competitive position 6.

The presence of Singapore’s sovereign wealth fund GIC as a cornerstone investor ($101 million commitment) in NTT’s REIT demonstrates institutional confidence in both the specific offering and in Singapore’s broader market reforms 1.

3️⃣ Strategic positioning within an increasingly competitive REIT landscape

NTT’s entry would position it as the third dedicated data center REIT in Singapore, joining established players Keppel DC REIT and Digital Core REIT in a segment showing strong growth potential 1.

Singapore has cultivated a substantial REIT ecosystem, with 40 traded S-REITs valued at approximately S$100 billion, comprising over 12% of the SGX’s total market capitalization 7.

The proposed 7-7.5% distribution yield for NTT’s REIT appears competitive in the current market, potentially attracting yield-focused investors in an environment where interest rate cuts are anticipated 7.

Data center REITs specifically have outperformed other REIT categories during economic downturns, as digital infrastructure demand remains relatively constant even during challenging economic periods 3.

The IPO’s strategic timing aligns with analyst forecasts predicting increased REIT activity in Singapore through 2025, particularly in sectors with strong fundamentals like data centers 6.

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