Brief Introduction:

NTT DC REIT (SGX: NTDU) primarily invests in real estate assets dedicated to data centre operations, as well as supporting infrastructure essential for the digital economy.

Since its listing on the Mainboard of the Singapore Exchange on 14 July 2025, NTT DC REIT has maintained a portfolio of 6 data centre assets comprising 1 property in Singapore, 1 in Vienna, Austria, and 4 in the United States (3 in Northern California and 1 in Northern Virginia). Collectively, these assets are valued at approximately US$1.7 billion.

By portfolio valuation, 63.9% of assets are located in the United States, 18.6% in Singapore, and 17.5% in Vienna. 

NTT DC REIT is Singapore’s third pure-play data centre REIT, following Keppel DC REIT (listed December 2014) and Digital Core REIT (listed December 2021).

Financial Performance (Forecast vs. Actual for 2H FY2025/26):

NTT DC REIT has a financial year end every 31 March. 

This section analyses its financial performance by comparing the IPO Prospectus forecasts against the actual results for the second half of FY2025/26 (1 September 2025 to 31 March 2026), a period during which the REIT was already listed, allowing for a timely assessment of forecast accuracy.

	Forecast	Actual	% Variance
Gross Revenue (US$’mil)	US$112.1m	US$115.3m	+2.8%
Property Operating Expenses (US$’mil)	US$61.0m	US$62.9m	+3.1%
Net Property Income (US$’mil)	US$51.1m	US$52.4m	+2.5%
Distributable Income to Unitholders (US$’mil)	US$39.2m	US$40.1m	+2.2%
Distribution Per Unit (US$’cents)	3.78 US cents	3.87 US cents	+2.4%

Gross revenue exceeded the IPO forecast by 2.8%, driven by slightly higher colocation and power service income (+0.5% above forecast) and a notably higher operating income (+56.8% above forecast). The uplift in operating income was largely due to increased tenant fitting-out revenue from heightened leasing activity and additional customisation work for its US portfolio, along with favourable foreign exchange movements.

Property operating expenses came in 3.1% above forecast, mainly from higher repair and maintenance costs in Northern Virginia and Singapore. As a result, net property income rose slightly less than gross revenue, at +2.5% versus +2.8%.

Consequently, distributable income to unitholders and distribution per unit were 2.5% and 2.4% above forecast, respectively, largely reflecting the higher net property income.

Portfolio Occupancy Profile (between 2Q FY2025/26 and 4Q FY2025/26):

The table below provides an overview of NTT DC REIT’s portfolio performance over the past 3 quarters, from 2Q FY2025/26 (ended 30 September 2025) to 4Q FY2025/26 (ended 31 March 2026):

	2Q FY2025/26	3Q FY2025/26	4Q FY2025/26
Portfolio Occupancy (%) ^^	95.1%	97.3%	98.5%
Portfolio WALE (years)	4.4 years	4.4 years	4.5 years
Rental Reversion (%)	+5.1%	+9.2%	+8.5%
% Contribution by Top 10 Tenants (%)	71.9%	74.1%	74.0%

^^ – Includes committed leases.

Overall, NTT DC REIT’s portfolio occupancy profile remains healthy and stable. Occupancy (including committed leases) has improved steadily over the period under review, rising from 95.1% in 2Q FY2025/26 to 98.5% in 4Q FY2025/26. In addition, all of its properties maintained occupancy levels of at least 90%, which I consider to be a strong performance.

The REIT also enjoys a well-diversified lease expiry profile. Based on its 4Q FY2025/26 disclosures, lease renewals are spread evenly over the next 5 financial years, with an average of only 11.7% of leases due for renewal annually between FY2026/27 and FY2030/31. Beyond that, 41.3% of its leases are not due for renewal until FY2031/32 or later, providing good visibility over its future income stream.

Another positive is the REIT’s ability to achieve consistently positive rental reversions. Over the past 3 quarters, rental reversions ranged from the mid- to high-single digits, which should provide support for revenue and distributable income growth in the periods ahead.

As for tenant concentration, the contribution from its top 10 tenants is relatively high at around 74% of rental income. However, this is not uncommon among pure-play data centre REITs, where tenant concentration tends to be elevated due to the presence of single-tenant or limited-tenant assets within their portfolios.

Debt Profile (between 2Q FY2025/26 and 4Q FY2025/26):

Similar to the review of the REIT’s portfolio occupancy profile, the table below provides an overview of its debt metrics over the past 3 quarters:

	2Q FY2025/26	3Q FY2025/26	4Q FY2025/26
Aggregate Leverage (%)	32.5%	32.5%	29.2%
Interest Coverage Ratio (times)	4.1x	4.0x	4.2x
Average All-In Cost of Debt (%)	3.90%	3.94%	4.01%
Average Term to Debt Maturity (years)	2.8 years	2.5 years	2.3 years
% of Borrowings Hedged at Fixed Rates (%)	70.0%	70.0%	70.0%

As at 4Q FY2025/26, aggregate leverage stands at a conservative 29.2%, providing the REIT with ample headroom to pursue yield-accretive acquisitions. The interest coverage ratio and proportion of borrowings hedged at fixed rates remain healthy at around 4x and 70%, respectively.

A minor cautionary point is the gradual increase in the average all-in cost of debt, which has risen from 3.90% in 2Q to 4.01% in 4Q FY2025/26. If this trend continues, higher borrowing costs could weigh on future distributable income and distribution growth.

Another factor to note is the declining average term to debt maturity. While there are no debt maturities due in the next 2 financial years (FY2026/27–FY2027/28), all borrowings will be up for refinancing in FY2028/29. Although the REIT has the flexibility to extend maturities through two 12-month extension options, this concentration presents a refinancing risk that investors should be mindful of.

Closing Thoughts:

After reviewing 3 quarters of post-IPO performance, NTT DC REIT appears to be delivering a stable overall performance.

On the financial side, based on the reported results for the second half of FY2025/26, gross revenue, net property income, and distributable income to unitholders all came in slightly above the IPO prospectus forecasts, with low single-digit percentage variances. I will continue to monitor its financial results in the coming quarters to see if this positive trend persists.

The REIT’s portfolio occupancy remains healthy, with all properties at or above 90% occupancy. Positive rental reversions have been recorded over the past 3 quarters, and lease expiries are well-distributed, with an average of just 11.7% of leases coming up for renewal each year over the next 5 financial years. This staggered schedule provides strong stability and visibility for its future rental income.

Regarding its debt profile, aggregate leverage is at a conservative level and has been trending downward, from 32.5% in 2Q and 3Q FY2025/26 to 29.2% in 4Q FY2025/26. Around 70% of borrowings are hedged at fixed rates, which provides interest rate protection. 

However, all borrowings are scheduled to mature in the same financial year (FY2028/29), although the REIT has the option to extend these maturities via two 12-month extension options. While this concentration is manageable, it is a point of caution. 

Additionally, the gradual increase in the all-in cost of debt over the past 3 quarters, if sustained, could put pressure on future distributable income due to higher financing costs.

Related Documents: 

1H FY2025/26: 
Media Release
Financial Statement
Presentation

9M FY2025/26:
Presentation

FY2025/26: 
Media Release
Financial Statement
Presentation

Disclaimer: At the time of writing, I do not have units of NTT DC REIT. 

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