{"id":49507,"date":"2026-09-02T09:22:19","date_gmt":"2026-09-02T01:22:19","guid":{"rendered":"https:\/\/www.phillipnova.com.sg\/?post_type=market_trends&p=49507"},"modified":"2026-09-02T09:23:24","modified_gmt":"2026-09-02T01:23:24","slug":"beyond-the-ai-chip-two-singapore-reits-riding-the-data-centre-boom","status":"publish","type":"market_trends","link":"https:\/\/www.phillipnova.com.sg\/cn\/market_trends\/beyond-the-ai-chip-two-singapore-reits-riding-the-data-centre-boom\/","title":{"rendered":"Beyond the AI Chip: Two Singapore REITs Riding the Data Centre Boom"},"content":{"rendered":"

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The AI investment story has largely centred on the companies supplying the technology \u2014 from advanced chipmakers to cloud platforms and software developers.<\/p>\r\n

But there is another layer to the AI boom that is easy to overlook: the physical infrastructure required to run it.<\/strong><\/p>\r\n

Every AI model, cloud service and data-intensive application ultimately needs somewhere to operate. That means more data centres, more computing capacity, more power and increasingly sophisticated cooling and connectivity infrastructure.<\/p>\r\n

For investors looking to participate in this structural trend without taking on the operational risks of running data centres themselves, Singapore’s REIT market offers two notable avenues: Keppel DC REIT (SGX: AJBU) and NTT DC REIT (SGX: NTDU).<\/strong><\/p>\r\n

The two REITs are riding the same broad data centre and AI infrastructure theme \u2014 but from very different starting points.<\/p>\r\n

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AI\u2019s Next Bottleneck May Not Be Chips<\/h2>\r\n

The rapid adoption of generative AI is increasing demand for computing power at an unprecedented pace.<\/p>\r\n

Training and running increasingly sophisticated AI models requires large clusters of high-performance processors, while AI applications are driving demand for cloud computing and data storage.<\/p>\r\n

That creates a second-order opportunity.<\/p>\r\n

The companies making the chips may capture the technology boom \u2014 but data centre owners provide the physical infrastructure that allows those chips to operate.<\/strong><\/p>\r\n

This is where data centre REITs come into the picture.<\/p>\r\n

By owning and leasing data centre properties, REITs can potentially benefit from rising demand for capacity while leaving the day-to-day operation of the facilities to specialised tenants and operators.<\/p>\r\n

For investors, the attraction is therefore twofold: exposure to a structural technology trend and the potential for recurring property income.<\/strong><\/p>\r\n

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Two REITs, Two Ways to Play the Boom<\/h1>\r\n

Singapore’s listed market offers two prominent names in this space.<\/p>\r\n

Keppel DC REIT<\/strong> is the established incumbent, with more than a decade of operating history and a geographically diversified portfolio.<\/p>\r\n

NTT DC REIT<\/strong>, meanwhile, is the newer entrant, having only listed on the SGX Mainboard in July 2025. It is backed by NTT Global Data Centers, one of the world’s major data centre operators.<\/p>\r\n

Both stand to benefit from the long-term growth in data centre demand \u2014 but their investment cases are quite different.<\/p>\r\n

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Keppel DC REIT: The Established Infrastructure Play<\/h2>\r\n
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Keppel DC REIT has established itself as one of Asia’s most prominent pure-play data centre REITs.<\/span><\/div>\r\n<\/div>\r\n<\/div>\r\n

Its portfolio is now worth approximately S$6.3 billion<\/strong>, comprising 25 properties across 10 countries<\/strong>, including Singapore, Australia, China and Europe.<\/p>\r\n

Its scale and diversification give investors exposure to multiple data centre markets rather than a single geography.<\/p>\r\n

Recent results also show continued income growth.<\/p>\r\n

H1 2026 DPU rose 11% year-on-year to S$0.0571<\/strong>, supported by the full-period contribution from Tokyo Data Centre 3 and positive rent reversions.<\/p>\r\n

Yet the market has not fully rewarded that growth.<\/p>\r\n

The unit price has fallen nearly 7% over the past year<\/strong>, despite the double-digit increase in DPU.<\/p>\r\n

That creates an interesting investment debate: is the market anticipating risks that have yet to show up in distributions, or has the share price fallen too far relative to the underlying income growth?<\/strong><\/p>\r\n

The risks to watch<\/h3>\r\n

Keppel DC REIT’s next phase of growth may be more challenging than its first.<\/p>\r\n

Higher financing costs and elevated property yields have made acquisitions less immediately accretive, slowing the pace at which the REIT can expand through acquisitions.<\/p>\r\n

There is also a specific issue in China.<\/p>\r\n

Bluesea, the master lessee at its Guangdong data centres, had accumulated more than S$55 million in unpaid rent as of end-April 2026.<\/strong> Chip availability bottlenecks in China were cited as one contributing factor.<\/p>\r\n

For investors, the key question is whether this issue stabilises or continues to affect distributable income.<\/p>\r\n

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NTT DC REIT: The New Growth Challenger<\/h1>\r\n
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If Keppel DC REIT represents the established player, <\/span>NTT DC REIT represents the newer growth story.<\/strong><\/div>\r\n<\/div>\r\n<\/div>\r\n

Listed on the SGX Mainboard in July 2025<\/strong>, NTT DC REIT is backed by NTT Global Data Centers, giving investors exposure to a portfolio linked to a major global data centre operator.<\/p>\r\n

The portfolio is smaller than Keppel DC REIT’s, with approximately US$1.5 billion in appraised value<\/strong> and 90.7 MW of design IT load<\/strong>.<\/p>\r\n

Its assets span the US, Vienna and Singapore<\/strong>, with the portfolio comprising predominantly freehold properties.<\/p>\r\n

Its maiden full-year results offered several encouraging signals.<\/p>\r\n

NTT DC REIT delivered FY25\/26 DPU of 5.56 US cents<\/strong>, beating its IPO forecast by 2.6%<\/strong>.<\/p>\r\n

Portfolio occupancy stood at 95.9%<\/strong>, rising to 99.2% on a committed basis<\/strong>, including leases secured but not yet commenced as of 30 June 2026.<\/p>\r\n

Rental reversions were also strong at +13.4%<\/strong> on renewed leases, while aggregate leverage improved to 29.2% from 31%<\/strong>.<\/p>\r\n

For a relatively new listing, these metrics point to a portfolio with strong occupancy, rental growth and improving balance-sheet leverage.<\/p>\r\n

But newer doesn’t necessarily mean lower risk<\/h3>\r\n

The trade-off is track record. NTT DC REIT has only been listed for a little over a year, meaning investors have limited evidence of how the portfolio will perform through a full property and interest-rate cycle.<\/p>\r\n

Its strong sponsor backing is a potential advantage, but investors will still be watching to see whether that translates into sustained DPU growth over time.<\/p>\r\n

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AJBU vs NTDU: Which Data Centre Play Stands Out?<\/h1>\r\n

The differences become clearer when the key numbers are placed side by side.<\/p>\r\n

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\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Metric<\/th>\r\nKeppel DC REIT (AJBU)<\/th>\r\nNTT DC REIT (NTDU)<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Currency<\/td>\r\nSGD<\/td>\r\nUSD<\/td>\r\n<\/tr>\r\n
200-Day SMA<\/td>\r\nS$2.20<\/td>\r\nUS$0.934<\/td>\r\n<\/tr>\r\n
52-Week Range<\/td>\r\nS$2.15\u2013S$2.44<\/td>\r\nUS$0.90\u2013US$1.07<\/td>\r\n<\/tr>\r\n
Latest DPU<\/td>\r\nS$0.0571<\/td>\r\nUS$0.0556<\/td>\r\n<\/tr>\r\n
Latest DPU \/ Performance<\/td>\r\n+11% YoY<\/td>\r\n+2.6% vs IPO forecast<\/td>\r\n<\/tr>\r\n
Trailing Dividend Yield<\/td>\r\n4.38%<\/td>\r\n5.86%<\/td>\r\n<\/tr>\r\n
Consensus Target<\/td>\r\nS$2.67<\/td>\r\nUS$1.27<\/td>\r\n<\/tr>\r\n
Implied Upside<\/td>\r\n21.4%<\/td>\r\n35.1%<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<\/div>\r\n

Figures are shown in each REIT’s native currency and are not directly comparable without FX adjustment.<\/em><\/p>\r\n

Based on Bloomberg consensus as of 1 September 2026<\/strong>, analysts see approximately 21.4% upside for Keppel DC REIT<\/strong> and 35.1% for NTT DC REIT<\/strong>.<\/p>\r\n

The higher implied upside for NTT DC REIT may partly reflect its status as a newer listing, where the market is still establishing a longer-term valuation and distribution track record.<\/p>\r\n

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Established Scale vs Emerging Growth<\/h1>\r\n

Ultimately, the choice between the two comes down to the type of exposure investors want.<\/p>\r\n

Keppel DC REIT<\/strong><\/span><\/h3>\r\n

The established play<\/strong><\/p>\r\n