SINGAPORE: Despite its IPO being oversubscribed, the NTT DC REIT’s first-day trading was muted, opening at US$1.02 and closing at US$1. Analysts noted the cautious market response may stem from trade tensions and elevated interest rates, emphasizing the listing’s significance for Singapore’s capital markets and the data centre sector.
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However, analysts were less impressed by the trading performance.
“We were hopeful that unit price should hit US$1.10 but the market reaction is much more muted than we anticipated,” said Mr Jonathan Koh, a director of research at UOB Kay Hian.
He said investors may be holding back their optimism because of the ongoing trade tensions and threats of higher reciprocal tariffs that have led to business uncertainty.
Mr Oriano Lizza, a sales trader at CMC Markets, described the share price moves as “notably measured rather than exuberant”, but said he viewed it positively.
“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.
He said the price action suggests institutional discipline rather than retail speculation, noting that GIC holds a 9.8 per cent stake, and is a long-term holder rather than a short-term trader.
Mr Lizza also pointed to the current interest rate environment being elevated, which traditionally pressures REIT valuations. He added that investors are “appropriately pricing in execution risk” given that the portfolio of NTT DC REIT spans three continents.
“The measured but positive reception demonstrates that Singapore’s capital markets are evolving toward greater maturity and sustainability, focusing on long-term value creation – a positive development for the broader market ecosystem,” he said.
“BREATH OF FRESH AIR”
Analysts also said that the successful listing of NTT DC REIT holds significance, in particular because of the size of the listing and the business being focused on data centres.
UOB Kay Hian’s Mr Koh said the listing signifies a resumption of large-cap companies going public on the SGX. The interest in the listing shows that investors are keen to invest in REITs with a good sponsor and that data centres remain a sought-after asset class, he said.
The IPO raised publicity for Singapore REITs since it was the largest REIT listing on the SGX mainboard in a decade, said Mr Jayden Vantarakis, head of ASEAN equity research at Macquarie Capital.
“As such, NTT DC REIT brings a breath of fresh air to the space,” he said.
The listing will likely elevate Singapore REITs and the SGX if it does well, given that there are limited pure data centre-focused REITs in Asia, he added.
Mr Lizza said the listing represents a “watershed moment” for Singapore’s capital markets.
“Beyond the impressive scale, this listing strategically positions Singapore as a regional hub for AI-related investment opportunities,” he said. NTT DC REIT provides…
