GIC back NTT data centre REIT in $1B IPO

SINGAPORE: Japanese telecom giant Nippon Telegraph and Telephone (NTT) has launched the bookbuilding process for a new data centre real estate investment trust (REIT) on the Singapore Exchange (SGX), aiming to raise up to US$864 million, including an overallotment option. The REIT, backed by Singapore’s sovereign wealth fund GIC, is positioned to tap into accelerating global demand for digital infrastructure.

According to a term sheet, the base offering is sized between US$772 million and US$812 million. An overallotment option of US$51.5 million could lift the final deal size to US$864 million. If the REIT achieves a 7.5% yield, the overallotment will be fully exercised, with NTT retaining a 20% stake.

An overallotment option allows for the sale of more shares than initially planned. This is meant to meet high demand or stabilise prices.

The REIT is marketed with an annualised distribution yield of 7% to 7.5% for the period from July 2025 to March 2026, and 7.29% to 7.8% for the following financial year, according to the preliminary prospectus filed on Jun 27.

The initial portfolio comprises six data centres—located in Ashburn, Virginia; three in Sacramento, California; Vienna, Austria; and Singapore—with a total value of approximately 240.7 billion yen (US$1.573 billion). These facilities span 41,000 square meters and offer a total capacity of 80 megawatts, with occupancy rates ranging between 90% and 97%.

NTT, which operates data centres across more than 20 countries, plans to retain a significant ownership stake post-listing and expand the REIT’s portfolio in future phases.

GIC, which manages an estimated US$847 billion in assets (according to GlobalSWF), has committed US$100.9 million to the offering, subscribing to 100.9 million units as a cornerstone investor. It marks GIC’s first investment in a Singapore-listed REIT, reflecting growing confidence in the digital infrastructure sector.

Other cornerstone investors include Hong Kong-based Viridian Asset Management, AM Squared, Pinpoint Asset Management, and the US-based Ghisallo Master Fund—signalling broad institutional interest from both regional and global markets.

The IPO comes amid moves to boost its equity market. Recent years have seen privatisations outnumber new listings. This trend led the Monetary Authority of Singapore (MAS) to propose tax incentives and create a S$5 billion fund to improve liquidity and attract more issuers in February 2025.

The financial outlook for NTT’s REIT is positive. For the nine months ending in March 2026, it expects revenue of US$167.3 million, with net property income projected at US$75.9 million and distributable income at US$57.3 million. According to Singapore’s REIT regulations, up to 90% of earnings will be distributed to unitholders.

The share sale has drawn strong investor interest. Industry reports indicate that rising construction costs and market saturation could affect yields in the long run, but at the same time, they highlight strong fundamentals; there is growing demand for data centres, steady absorption of capacity, and declining vacancy rates worldwide.

With the REIT to start trading in mid-July, NTT aims to strengthen its position in the global digital infrastructure market while reinforcing Singapore’s role as a key hub for REITs and tech-driven investments.