Singapore Set for Largest IPO in Eight Years with NTT DC REIT

Singapore’s stock market is gearing up for its largest initial public offering (IPO) in eight years, set to launch on July 14, 2024. The debut is for the NTT DC REIT, a real estate investment trust focused on the rapidly expanding data centre sector. Valued at approximately US$773 million, this listing is backed by Singapore’s sovereign wealth fund, GIC, and Japan’s NTT Group.

This IPO comes at a crucial time for the Singapore Exchange (SGX), which has experienced subdued interest in major listings over recent years. The introduction of NTT DC REIT is expected to invigorate market activity and attract investor attention. The REIT’s focus on data centres reflects a growing trend driven by the increasing global demand for data storage and the energy-intensive requirements of artificial intelligence technologies.

Significance of Data Centres in Asia

Trading for NTT DC REIT will commence at 14:00 local time, as confirmed by the IPO’s managers in an announcement on the SGX website. This marks the most significant listing on the exchange since 2017, when the NetLink NBN Trust raised S$2.3 billion (approximately US$1.8 billion).

According to the IPO prospectus, the NTT Group, through its global data centre subsidiary NTT GDC, is recognized as the world’s third-largest data centre provider. Singapore has established itself as a premier hub for data centres across Asia, leveraging its strategic location along critical submarine cable routes to facilitate connectivity throughout the region and beyond.

The prospectus also highlights that from 2024 to 2027, the power consumption of data centres is projected to grow at a compounded annual growth rate of 27.5 percent, following significant double-digit growth over the past five years. This surge underscores the critical role that data centres will play in supporting the digital economy.

As NTT DC REIT prepares to enter the market, stakeholders are optimistic about its potential to enhance investor confidence and stimulate further listings on the SGX. The growing reliance on digital infrastructure positions this IPO as a timely opportunity for investors looking to capitalize on the expanding data centre market.