Foreword
I don’t usually write about REITs, let alone IPO play-by-plays. But a reader asked, and this one deserves attention. Since its July 2025 debut, NTT DC REIT has dominated headlines. Marketed as Singapore’s largest REIT IPO in years, it rode the data center megatrend, backed by NTT and anchored by GIC. On paper, it had all the right ingredients.
Thirty days on, reality looks less flattering. Units that listed at USD 1.00 now trade closer to USD 0.93. The hype has faded, and investors are questioning whether the slide reflects broader sentiment or deeper issues within the REIT. We’ll break down the numbers, compare them with peers like Keppel DC and Digital Core, and test if the prospectus promises can survive real-world pressure.
This is not a verdict. It is a reality check.
Pre-IPO: The Pitch and the Promise
The hype around NTT DC REIT began long before it hit the boards. Branded as Singapore’s largest REIT IPO in years, it was sold as a gateway into the data center boom, backed by NTT’s scale and GIC’s credibility. The formula looked bulletproof.
The prospectus leaned heavily on stability: a global portfolio of data centers, long leases, and near-full occupancy. Yields upward of 7% and conservative gearing painted the image of a defensive, income-first REIT with growth tailwinds.
Media coverage only added fuel to the fire. Articles framed it as part of the data center megatrend, which struck a chord with institutions and retail alike. The order book filled quickly. Anchors provided legitimacy, and the retail crowd followed. At launch, it looked like easy money.
Yet polished projections remained just that. Behind the promises of yield and stability were exposures that had not yet been tested in the market. Currency swings, tenant risks, and operational realities sat in the background, waiting to be priced in. The IPO story was clean, but untested outside the prospectus.
The Numbers at Listing
| Metric | Value |
|---|---|
| Portfolio Value | US $1.572 b |
| Occupancy Rate | 94.3 % |
| WALE (by Monthly Base Rent) | 4.8 years |
| Forecasted Distribution Yield | 7.5% (9M 2025 / 2026) 7.8% (FY 2026 / 2027) |
| Gearing Ratio | ~ 35% |
On the surface, these numbers painted the picture of a defensive and income-friendly REIT. A sizeable portfolio, strong occupancy, a reasonable lease tenor, and projected yields close to 8% gave investors the sense of a stable launch.
At first glance, these figures seemed competitive, though not dramatically better than peers like Keppel DC and Digital Core. We’ll return to that comparison later, because the context matters more than the raw numbers.
Post-IPO: The Dust Settles
NTT DC REIT listed in July at USD 1.00 per unit. Backed by NTT’s reputation and GIC’s anchor, the debut carried a sense of certainty. For a short while, that confidence seemed justified.
A month later, reality feels different. Units trade closer to USD 0.93, about 7% below the IPO price. For a trust that was pitched as both steady and growth-driven, the slide was steeper than many expected. The drop alone erased almost a year’s worth of the forecast yield, and that stung early investors.
Some of the weakness came from the wider market. Rate worries have dulled appetite for yield plays across the board. Yet NTT DC’s decline was steeper than peers like Keppel DC and Digital Core, suggesting the slide was not just macro.
The market was not just pulling back on sentiment. It was stress-testing the foundations of the story. USD-linked payouts, a lease profile under five years, and no clear hedging stance looked less comforting once the glow of the IPO wore off.
Bond Yields Don’t Explain It
Bond yields often serve as the initial explanation.
Between July 15 and August 15, US 10-year Treasury yields fell by roughly 4%. This drop should have made REITs more appealing; however, NTT DC REIT still declined.
This disconnect matters. When the sector should be more attractive, but the newcomer slides, the market is clearly questioning the REIT specifically
Peer Comparison
Since bond yields did not provide the answer, we look towards peer performance for more context.
- AJBU (Keppel DC REIT) rose from SGD 2.23 to SGD 2.30, a gain of about 3%.
- DCRU (Digital Core REIT) fell from USD 0.53 to USD 0.50, a drop of roughly 6%.
- NTDU (NTT DC REIT) declined from USD 1.00 to USD 0.93, about 7% down.
With bond yields easing, the setup should have supported REITs. Keppel DC gained ground, Digital Core slipped under the weight of tenant concerns, and NTT DC fared worst. That relative weakness points to doubts about its fundamentals.
| Metric | NTT DC | Keppel DC | Digital Core | Insight |
|---|---|---|---|---|
| Occupancy | 94.3 % | 97.2 % | 98.0 % | Occupancy shortfall hints at underutilisation risk |
| WALE | 4.8 years (by MBR) | 6.3 years (by NLA/income) | 4.7 years | Shorter lease tenor heightens rollover exposure |
| Gearing | ~35 % | ~31.5 % | ~38 % | Mid-pack leverage but still enough to pressure distributions if rates rise |
| Portfolio AUM | US$1.572 b | US$3.7 b | US$1.4 b | Half Keppel DC’s scale, limiting liquidity and pricing strength |
| Tenant Concentration | Top 10 = 62.6 % Top 3 = 47.4 % | Not broken down | Not broken down | High reliance on few tenants weakens diversification defence |
Stacked against its peers, NTT DC shows weaker occupancy, a shorter lease profile, and higher concentration risk. These gaps help explain why its shares lagged even in a supportive bond yield environment. The sector was not punished as a whole. The weight fell specifically on NTT DC.
Where Trust Broke Down
Currency was a weak link. Both NTT DC REIT and Digital Core trade in USD, a structure that can deter Singaporean retail investors. The prospectus admitted to FX exposure but offered no binding hedging framework. It simply stated that the manager may use instruments, without spelling out scope, duration, or coverage. In practice, there was no assurance that distributions would be shielded from USD/SGD swings.
The 7.5 – 7.8% yield projections looked compelling, but those figures were in USD. Without consistent hedging, the effective yield could shrink once converted. For a REIT marketed as defensive, this uncertainty undercut its headline appeal.
Still, FX alone does not explain why NTT DC underperformed Digital Core, even though Digital Core faced louder tenant risks. The sharper drop pointed to deeper skepticism, that NTT DC’s prospectus assumptions were not trusted, and that the yield premium did not justify the risks.
Keppel DC’s resilience showed the contrast. Investors appeared to reward track record, stability, and clarity over projection. The market’s verdict was blun. NTT DC’s weakness came less from external headwinds and more from doubts about its ability to deliver.
Closing Thoughts
The first 30 days have stripped away the IPO shine. NTT DC REIT entered with pedigree and a polished pitch, but the market demanded proof, not promises. Investors signaled that credibility rests on more than broad assurances.
The next month is critical. Yield projections must hold, tenant metrics need to remain stable, and financing costs cannot surprise. Any misstep, even the hint of one, will deepen skepticism.
At this stage, NTT DC REIT’s story is no longer about potential. It is about execution. The market has set the test. Now the REIT must deliver.
Engagement
The next month is critical. Yield projections must hold, tenant metrics need to remain stable, and financing costs cannot surprise. At this stage, NTT DC REIT’s story is no longer about potential. It is about execution.
What would convince you more? A quarter of smooth delivery, or a higher yield to justify the risks?
Equity-Pulse 
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