GIC-backed NTT DC REIT positions Singapore as ‘regional hub for AI-related investment opportunities' despite muted trading debut, analyst says
Still, CMC Markets sales trader Oriano Lizza said the listing would help strategically position Singapore as a 'regional hub for AI-related investment opportunities,' as reported by Channel News Asia ( CNA ).
On Monday, the REIT began trading on SGX at 2 p.m., opening at US$1.02 (S$1.31) — slightly above its offer price of US$1. It rose to a high of US$1.03 during the session but ended the day back at US$1.
Mr Yutaka Torigoe, CEO of the REIT's manager, said he was heartened by what he called an 'excellent debut,' noting it reflected investor confidence in the REIT's portfolio quality, its growth prospects, and the overall outlook for data centres around the world. See also GIC is now 3rd most powerful asset owner in the world
However, Jonathan Koh, director of research at UOB Kay Hian, said they had hoped the unit price would reach US$1.10, but the market reaction was more muted than anticipated. He noted that investors could be holding back due to ongoing trade tensions and the threat of higher tariffs, which have added to business uncertainty.
Mr Lizza, who described the share price move as 'notably measured rather than exuberant,' added that 'while the IPO was 4.6 times oversubscribed overall and the public offer was 9.8 times oversubscribed, the tepid price performance actually demonstrates mature investor behaviour.'
He said the price movement suggests institutional discipline rather than retail speculation, noting that long-term holder GIC holds a 9.8% stake.
Mr Lizza also highlighted the current elevated interest rate environment, which typically weighs on REIT valuations, adding that investors are 'appropriately pricing in execution risk,' given NTT DC REIT's portfolio, which spans three continents.
According to the IPO prospectus, the NTT Group is the world's third-largest data centre operator through its global business arm, NTT Global Data Centers (NTT GDC).
On Monday, when asked why the company chose Singapore over Tokyo, Doug Adams, President and CEO of NTT GDC, told CNBC's Squawk Box Asia: 'The Singapore market is a great market for data centres in general, and we believe the best market in the world for data centre REITs. What makes Singapore unique is the fact that Singapore appreciates global portfolios of data centres.' /TISG
Read also: Former Senior Minister Teo Chee Hean to step down from GIC's board on June 30 after announcement of joining Temasek
Featured image by Depositphotos
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