NTT DC REIT, which has a March year-end, declared its maiden distribution of 5.56 US cents per Unit, outperforming IPO forecast of 5.42 US cents per Unit. The distribution will be paid on June 29 with the last day of trading on a cum-distribution basis on May 18.
NTT DC REIT achieved gross revenue of US$164.8 million for FY2026, exceeding IPO forecast by 2.5%. The outperformance was driven by stronger colocation and power services revenue, as well as higher tenant fit-out revenue, on the back of increased leasing activity and additional customisation works for the US portfolio.
Net property income of US$74.9 million was 2.3% above IPO forecast, driven by the higher revenue, lower-than-expected real estate taxes and favourable foreign exchange impact; these gains were partially offset by higher repair and maintenance costs and other property expenses. Distributable income of US$57.5 million was 2.5% above forecast, taking into account net finance costs of US$14.9 million, which were 3.3% below forecast. Aggregate leverage was 29.2% and ICR stood at 4.2 times.
In FY2026, the Manager successfully renewed leases representing US$1.3 million in monthly base rent (MBR) and recorded a rental reversion of 8.5%. Including the SG1 Master Services Agreement (MSA) with NTT Singapore Pte. Ltd., which was successfully renewed March 31. The renewed MSA with NTT Singapore provides for a 23% rental reversion, with rent increasing from $385 per kilowatt to $474 per kilowatt, and includes fixed annual escalations of 5%. The lease term was also extended from a one-year arrangement to a three-year term that commenced on April 1. NTT Singapore remains SG1’s anchor tenant, with 2.7MW of contracted capacity. The Manager is also actively engaging prospective tenants to backfill 0.3MW of capacity returned by NTT Singapore.
As at Mar 31, portfolio occupancy by IT load improved by 0.5 percentage points to 95.1% while committed portfolio occupancy was 98.5%. The weighted average lease expiry of NTT DC REIT’s portfolio stood at 4.5 years, with less than 17% of leases expiring in the current financial year ending Mar 31, 2027. Additionally, 89.4% of the leases by MBR incorporate fixed escalation clauses as at Mar 31, while a further 3.3% have CPI-linked escalations. The portfolio’s weighted average rental escalation by MBR stood at 3.1%, providing strong income visibility and supporting sustainable growth.
To manage power cost volatility, NTT DC REIT incorporates pass-through arrangements across the majority of its leases, complemented by a fixed electricity contract at SG1. Its leases also include provisions for rental adjustments in the event of significant increases in electricity costs.
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Based on an independent valuation, NTT DC REIT’s portfolio as at 31 March 2026 is valued at US$1,670.2 million, up 11.3% from the purchase consideration of US$1,500 million at IPO, reflecting the positive rental reversions and continued rental growth in NTT DC REIT’s key markets.
NTT DC REIT closed at US$1.01, unchanged year-to-date. Its NAV as at Mar 31 is US$1.08.
