NTT Files IPO Prospectus with Monetary Authority of Singapore

Japanese telco Nippon Telegraph and Telephone (NTT) on Friday filed its Initial Public Offering (IPO) prospectus with the Monetary Authority of Singapore (MAS), spinning off four data centres in the US, one each in Austria and Singapore into NTT DC REIT, a REIT to be listed on the Singapore Exchange (SGX).

NTT has decided to transfer the assets of the six data centres, owned by the asset holding companies under NTT Limited, one of its consolidated subsidiaries, to the Singapore real estate investment trust NTT DC REIT on May 8 this year. The assets will be transferred on 14 July 2025, NTT Data said.

According to the prospectus, these six data centre assets are carrier-neutral and Tier III or Tier III-equivalent. The carrier-neutrality of the IPO portfolio gives customers the flexibility to choose the best connectivity provider for their needs.

The appraised value of the IPO portfolio is approximately $1.6 billion and the six assets are held on freehold basis, except for the Singapore data centre, which is on leasehold land expiring in 2070. The initial lease term runs until August 2040, and a covenant with JTC grants a further 30-year term until 2070 subject to certain conditions stipulated in the lease.

The conditions for a further 30-year term until 2070 include the tenant making a fixed investment of at least $35 million during the initial lease term; the gross plot ratio of the site being not less than 2.47 but not more than 2.50; and at the expiry of the initial lease term there being no existing breach or non-observance of any of the tenant’s obligations.

The Japanese telecom company has confirmed in writing that the first two conditions have been satisfied and there are currently no known breaches, satisfying the latter condition. The sponsor is NTT Limited, which is a part of the NTT Group, and is a company incorporated in England and Wales and is a wholly-owned subsidiary of NTT DATA.

NTT DATA Group Corporation holds a 55% interest in NTT DATA, and the remaining 45% is held by Nippon Telegraph and Telephone Corporation. The sponsor will be the largest unitholder of NTT DC REIT, with an ownership stake of approximately 25%.

The NTT Group, through its global data centre business NTT Global Data Centers, is the third-largest data centre provider globally (excluding China), with a footprint of over 2,200 MW.

Cornerstone Investors

The Cornerstone investors include GIC, AM Squared Limited, Ghisallo Master Fund, Hazelview Securities, Pinpoint Asset Management (Singapore), Viridian Asset Management Limited and UBS’s Singapore branch, on behalf of some of its wealth management customers.

As a sign of commitment to NTT DC REIT, the global sponsor right of first refusal (ROFR) has been granted in favour of NTT DC REIT across approximately 2,000 MW of data centre properties over the sponsor’s portfolio of over 2,200 MW of data centre properties.

The prospectus also said that NTT DC REIT’s growth trajectory was dependent on its ability to source “high-quality, accretive acquisitions” post-IPO.

“This creates a mutually beneficial circle in which the sponsor group finances new developments using capital unlocked by divesting stabilised assets into NTT DC REIT, and NTT DC REIT is able to grow its portfolio with accretive acquisitions of high-quality, stabilised assets,” it said.

The joint issue managers for this deal is BofA Securities and UBS; joint global coordintors BofA Securities, UBS and Mizuho, whereas joint book runners and underwriters are BofA, UBS, Mizuho, Citi and DBS.