NTT Data Group, a Japanese company, has submitted a preliminary prospectus to Singapore’s financial regulator for a listing of a Real Estate Investment Trust on the Singapore Exchange. This could be the biggest REIT Initial Public Offering in Singapore since 2017.
Dow Jones Newswires reported that people who are familiar with this matter believe the IPO may raise up to 800 million US Dollars.
NTT DC REIT intends to sell its units for 1 dollar US each. This deal will mark the revival of Singapore’s large-scale listing after an extended lull.
NTT Data already has seven investors that have committed to buying 172.77 millions units.
In order to build trust among retail and institutional investors, it is important that you secure cornerstone participants early on in the process.
GIC is leading cornerstone investor
GIC, the sovereign wealth fund of Singapore, has invested more than $100 million US dollars in this offering. This makes it the biggest cornerstone investor.
Hazelview Securities and Pinpoint Asset Management are also key supporters, as is Hong Kong’s Viridian Asset Management.
Cornerstone investment is a strong indicator of investor confidence. Data centre infrastructure has been gaining in popularity due to the growing demand for cloud computing, AI, and digital transformation.
NTT DC REIT’s diversified data centre portfolio
NTT DC REIT has six data centers in its initial portfolio, four of which are in the United States and Austria. The other two centres are in Singapore.
Facilities are located in top-tier US markets and Asia-Pacific regions, allowing for geographical and operational diversity.
NTT stated in its prospectus filed with Singapore’s Monetary Authority on June 27 that it expected continued growth of the global data center market. This was supported by increased pricing, increasing capacity absorption, and decreasing vacancy rates.
Investors are seeking exposure to digital infrastructure, and this is reflected in the company’s booming capital flow into data centers.
NTT has an estimated market cap of 90 billion dollars and operates the largest global data network, covering over 20 countries in the Americas and Europe as well as Asia-Pacific and the Middle East.
Focus on REIT Market Recovery
The listing, if successful, would be Singapore’s largest REIT IPO ever since NetLink NBN Trust raised almost 2 billion US Dollars in July 2017.
Singapore, Asia’s largest hub for real estate investment trusts (REITs), has 41 REITs listed and more than 65 billion US dollar in property trusts as of March.
The investment vehicle is popular with investors who are looking for high returns. It offers an annual return of between 6 and 7 percent, which is well above the local fixed-deposit rates.
NTT’s IPO is coming at a moment when Singapore capital markets seek to regain momentum.
The Monetary Authority of Singapore has been exploring reforms after recent delistings outpaced the number of new listings.
An equities review group had proposed earlier this year a set of measures, including tax incentives and an investment fund worth five billion Singapore dollars to encourage more listing and increase liquidity.
BofA Securities is advising NTT DC REIT about the IPO. The IPO could launch and price in the next few months depending on market and regulatory conditions.
The post NTT Data Group to IPO Singapore REIT in largest deal since 2017 will be updated as new developments unfold.
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