Japan’s NTT Files Draft Prospectus for Potential $1B Singapore Data Centre IPO

Singapore’s biggest exchange listing of the current decade could be on the way next month with Japan’s Nippon Telegraph and Telephone Corp having filed a preliminary initial public offering prospectus for a data centre real estate investment trust.

Documents made available on the Monetary Authority of Singapore website on Friday show that the Japanese telecom giant has gathered cornerstone investors including sovereign wealth fund GIC to support the listing of NTT DC REIT, which holds six properties valued at a combined $1.57 billion.

No timetable for the listing has been released at this time with the pricing and scale of the offering also yet to have been made public. A report by Reuters last week cited market sources having indicated earlier this year that the IPO could be worth up to $1 billion.

The prospective listing would represent a boost for Singapore’s stock exchange, which has seen a wave of privatisations in reaction to declining stock prices and thin trading volumes. In February the government rolled out tax incentives and a special fund aimed at boosting market liquidity in an attempt to stimulate investor interest in the market.

Six Properties in Three Continents

The proposed REIT would give investors exposure to the world’s three largest data centre regions – North America, Europe and Asia Pacific. The REIT would acquire rights to six data centres including three in California, one each in Virginia and Vienna, Austria, as well as a property in Singapore. Together the portfolio represents 90.7 MW of capacity as of 31 December. 

An unaudited pro forma income statement for the nine months ending 31 December showed the portfolio incurred a loss of $6.1 million for the period after suffering a loss of $29.5 million for the same period a year earlier, the prospectus showed. 

Gross revenue for the portfolio stood at $161 million for the portfolio in the final nine months of last year – up from $116.5 million in the same period a year earlier. 

Through the IPO the REIT would acquire, directly or indirectly a 100 percent interest in the IPO portfolio at an aggregate purchase price of approximately $1.57 billion, the draft prospectus said. 

Cornerstones Locked In

Singapore’s sovereign wealth fund, GIC is subscribing to more than 100 million units in the listed trust with the other cornerstone investors expected to hold 71.9 million units, according to the draft document. 

Among the other cornerstone investors are Hong Kong-based AM Squared Limited which would invest in the REIT through its AM Asia Strategies Master Fund with that company’s compatriots at Viridian Asset Management also joining. 

US investment firm Ghisallo Capital Management is part of the cornerstone group through its Ghisallo Master Fund, as are Toronto-based Hazelview Securities and Pinpoint Asset Management of Singapore.  

Acting through its Singapore branch, UBS AG is also joining the cornerstone group as a custodian on behalf of some of its wealth management customers, the prospectus showed. 

Singapore units of Merrill Lynch and UBS AG are joint issue managers, while the local branches of  Merrill Lynch, UBS and Mizuho Securities are the joint global coordinators.

The Singapore businesses of Merrill Lynch, UBS, Mizuho Securities and Citigroup Global Markets, along with hometown favourite DBS Bank, are the joint bookrunners and underwriters. 

The NTT DC REIT listing is expected by analysts to be the biggest debut on Singapore’s stock market since US data centre operator Digital Realty listed Digital Core REIT on the SGX with a $977 million portfolio valuation in 2021.