Nippon Telegraph & Telephone Corp (NTT), among the world’s biggest data center service providers, is planning an initial public offering (IPO) of its data center real estate investment trust (REIT) on the Singapore Exchange (SGX), aiming to raise $1 billion. This anticipated listing, projected for the second half of 2025, marks the most significant IPO on the SGX since 2021 and represents a notable revival in REIT activity within Singapore’s financial markets. The proposed REIT would house NTT’s significant data center assets in Southeast Asia, highlighting the strategic importance of the region in NTT’s expansive growth plans.
NTT has enlisted the services of financial giants Bank of America and UBS to aid in structuring this substantial IPO. This move follows an earlier Bloomberg report from September 2024, which initially hinted at NTT’s inclination toward a Singapore listing. Should the IPO succeed, this REIT would become part of NTT’s existing data center trust listed on the Tokyo exchange, reinforcing the company’s commitment to expanding its data infrastructure footprint in Southeast Asia. This IPO is not only a strategic business maneuver for NTT but also a potential catalyst for bolstering the overall IPO market in Singapore, which witnessed a slowdown in recent years.
NTT’s Strategic Investments and Background
In its mid-term strategy announced in May 2023, NTT unveiled plans to invest a staggering $10 billion in data center infrastructure by 2027. This aggressive investment strategy underscores NTT’s resolve to ascend as a dominant player in the global data center market. Recent key developments include the inauguration of a new data center in Bangkok in April 2024 and the groundbreaking of a 12-megawatt data center in Thailand in March 2024. Furthermore, NTT has ambitious projects underway in Jakarta, with a data center expected to be completed by early 2026, and in Johor, Malaysia, where an $88 million site acquisition was finalized in August 2024.
NTT’s continuous efforts to boost its data center capacities are geared towards meeting the growing demand for data services in the region. Currently, NTT’s vast data center network boasts a capacity of 1.3 gigawatts, spanning over 20 countries and regions globally. By reinforcing its infrastructure and expanding its footprint, NTT aims to cater to the surging data storage and processing needs driven by advancements in technologies like cloud computing, artificial intelligence, and the Internet of Things. These infrastructural investments not only fortify NTT’s service capabilities but also position the company to capitalize on the burgeoning digital economy in Southeast Asia and beyond.
Impacts on Singapore’s IPO Market and Industry Trends
The planned IPO is expected to breathe new life into Singapore’s subdued IPO market, which saw only four IPOs raising a modest $31 million in 2024. Market experts like PS Lee from the National University of Singapore forecast a timeline of 6 to 12 months for market readiness, contingent on obtaining necessary regulatory approvals, favorable market conditions, and achieving key preparatory milestones such as regulatory filings, investor roadshows, and pricing strategies. This timeline suggests that a successful IPO would depend not only on NTT’s internal preparations but also on the broader market context, including investor sentiment and economic conditions.
The listing of NTT’s REIT on SGX could potentially set a benchmark for future real estate investment trust listings in the region. The resurgence in REIT activities can be attributed to favorable conditions such as lower interest rates and increased regulatory support by the SGX. Other companies eyeing potential REIT listings in Singapore include Centurion Corporation and France’s Praemia REIM. For instance, Centurion Corporation is considering launching a REIT focused on student and worker housing assets. Meanwhile, GDS’s international arm, which recently rebranded to DayOne, has indicated intentions towards a potential REIT IPO as well.
The Future and Broader Market Implications
Nippon Telegraph & Telephone Corp (NTT), one of the world’s leading data center service providers, plans to launch an initial public offering (IPO) for its data center real estate investment trust (REIT) on the Singapore Exchange (SGX), aiming to raise $1 billion. Scheduled for the second half of 2025, this IPO would be the largest on the SGX since 2021, signaling a resurgence in REIT activity in Singapore’s financial sector. The REIT will comprise NTT’s substantial data center assets in Southeast Asia, underscoring the region’s importance in NTT’s growth strategy.
NTT has partnered with Bank of America and UBS to facilitate this major IPO. This decision aligns with a Bloomberg report from September 2024 that indicated NTT’s interest in a Singapore listing. If successful, the REIT would complement NTT’s existing data center trust listed on the Tokyo exchange, emphasizing NTT’s dedication to expanding its data infrastructure in Southeast Asia. This IPO is not only a strategic growth initiative for NTT but also a potential boost for Singapore’s IPO market, which has experienced a downturn in recent years.