To The Moon

NTT DC Debut: Will You Buy Data Center REIT? 💻

Singapore just witnessed its largest IPO in four years — and it was all about digital infrastructure. NTT DC REIT raised a strong US$773M, backed by Japan’s telecom giant NTT, offering investors rare exposure to the fast-growing world of data centres.

But instead of a breakout, the stock opened with a whimper. So here’s the question smart investors are asking: Was this just a bad day to list — or a long-term play misunderstood by the market?

📉 IPO Recap: Why the Tepid Debut?

Despite solid fundamentals, sentiment around REITs remains shaky. With interest rates still elevated and uncertainty over the next SORA move, institutional buyers are cautious about yield-heavy products.

Add in global IPO fatigue and rising utility costs for data centre operators — and NTT DC’s lukewarm opening starts to make more sense. But don’t mistake short-term nerves for long-term value misfires.

🌐 What’s Special About NTT DC REIT?

Unlike typical office or retail REITs, NTT DC REIT owns a portfolio of six operational data centres — across Singapore, the United States, and Austria — worth over US$1.6 billion.

It’s the first cross-border digital infrastructure REIT on SGX. In a world driven by AI, video streaming, and cloud computing, this means rising demand for data, power, and secure storage. That’s a long-term macro tailwind few other REITs can claim.

Even better, it comes with a 10-year sponsor support deal from NTT — ensuring committed asset backing and aligned interests.

📊 Keppel DC vs NTT DC: Who Wins in Yield & Growth?

Keppel DC REIT ($AJBU.SI) has been the go-to for Singapore REIT investors wanting digital exposure. It’s known, trusted, and locally anchored.

But NTT DC brings new muscle to the ring, offering international reach and exposure to higher-margin markets. Here's a quick compare:

Dividend Yield: Both hover in the 5.5–6% range

Gearing: Slightly higher for NTT DC, but within safe SGX limits

Pipeline: NTT can inject more global assets with hyperscaler tenants

Investor Base: Keppel has the retail loyalty; NTT brings global expansion

The trade-off? Familiarity vs scalability.

🏢 Are Data Centre REITs Still in Play?

Absolutely — but the narrative has evolved.

While AI, fintech, and content delivery are driving demand for data centres, operating costs are rising. Power, cooling, and staffing are all inflation-sensitive. And without tech-anchored leases or hyperscaler clients, many REITs face tighter margins.

Still, data centre REITs are in a unique position: they’re not just landlords — they’re AI-era infrastructure providers.

📈 What Other REIT Sectors Are Attractive Now?

Looking beyond digital REITs, here’s where some retail investors are reallocating as rates potentially peak:

Industrial REITs: Benefitting from nearshoring and e-commerce

Hospitality REITs: Rebound from tourism and events

Retail REITs: Winners in suburban or mixed-use malls

Healthcare REITs: Stable long-term leases and demographic tailwinds

If the Fed pivots and MAS follows, we could see a broad REIT re-rating across the board in 2025.

💬 Final Take: NTT DC — Dip Opportunity or Missed Chance?

NTT DC REIT’s debut wasn’t flashy. But in today’s macro landscape, quiet entries often signal overlooked potential. With global infrastructure exposure, AI-aligned assets, and a major telco sponsor, NTT DC offers a differentiated REIT play.

Is it perfect? No. Investors still need clarity on distribution policies, expansion timeline, and currency hedging. But compared to traditional office or mall REITs, it might just offer better growth + yield dynamics in a digitised economy.

So we ask:

👉 Are you buying NTT DC REIT on weakness?

👉 Between Keppel DC and NTT DC, who’s your digital infra pick?

👉 And more broadly — which REIT segment are you most bullish on heading into 2025?

Drop your take below. Let’s crowdsource some REIT conviction. 🏢⚡📉📈

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