Singapore Telecommunications (Singtel) is considering a real estate investment trust (REIT) or another permanent capital vehicle as it prepares to finance growth in data centres and sovereign artificial intelligence (AI) beyond its Singtel28 plan.
It is assessing longer-term funding structures that could support continued asset injections, alongside capital partnerships, private funding, project debt, asset-recycling proceeds and its balance sheet.
“We are also considering another capital lever — permanent capital pools that we can continuously tap for longer-term needs. This could be in the form of a public listing of a real estate investment trust, in which we can continue to inject assets,” says Arthur Lang, Singtel group chief financial officer, in the company’s FY2026 annual report.
Funding the next phase
The financing plans come as Singtel increases investment in its regional data centre platform Nxera and RE:AI, its sovereign AI cloud business.
Capital expenditure is expected to rise to about $3 billion in the year ending March 2027 from $2.5 billion a year earlier. About $1.2 billion will be growth capital, mainly for Nxera and RE:AI, with around $700 million of that amount fully funded.
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A significant portion of Nxera’s funding will be supported by Singtel’s capital partnership with KKR & Co., shares Lang. RE:AI investments are underpinned by customer contracts, which he says would reduce the risk of holding unused graphics-processing units and support future recurring revenue.
Singtel will also seek external private capital and project-level debt. Lang says the group’s operating-company earnings, regional-associate contributions and asset-recycling programme would remain central to funding growth while supporting dividends.
Building a digital infrastructure group
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The funding strategy supports group chief executive officer Yuen Kuan Moon’s effort to shift Singtel towards digital infrastructure and technology services.
“We see ourselves evolving from a largely traditional telco group into a global player in digital infrastructure and services, with a strong Asian focus. Asia sits at the very heart of our business and identity and is the source of our long-term growth opportunities,” says Moon in the same annual report.
Connectivity will remain fundamental because AI and other digital services depend on secure and resilient networks. However, it will increasingly be one part of a broader business spanning data centres, cloud infrastructure, enterprise technology and AI services, he notes.
The company plans to use its acquisition of STT GDC, in partnership with KKR, to expand its data centre presence beyond Southeast Asia. Together with Nxera, the platforms would give Singtel a combined design capacity of about 2.8 gigawatts upon completion of the transaction.
Singtel says STT GDC and Nxera will operate independently, allowing it to pursue different market strategies while serving hyperscale cloud providers and enterprise customers.
Energy targets alongside AI growth
The expansion of AI-ready infrastructure also places greater emphasis on Singtel’s energy and emissions targets.
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The company has set goals to cut Scope 1 and 2 emissions by 55% and Scope 3 emissions by 40% from an FY2023 baseline. Its Scope 1 and 2 emissions had fallen 28.3% as of March 31, while 29.5% of its electricity consumption was backed by renewable sources.
Singtel says it is incorporating energy efficiency, renewable energy and resource optimisation into the design and operation of its data-centre infrastructure as it expands capacity for AI workloads.
AI strategy and workforce
Singtel describes its AI strategy as operating across three roles: adopter, provider and enabler.
The group is using AI internally to improve workflows and operations, while NCS develops enterprise AI systems and Digital InfraCo provides the underlying infrastructure through data centres, cloud capacity and networks.
That approach is paired with Singtel’s HI × AI × CI framework — human intelligence, artificial intelligence and culture intelligence. The company says the model combines human judgement, accountability and empathy with AI-driven productivity and innovation, supported by workplace practices intended to build trust and help staff adapt to new ways of working.
More than 90% of group employees had completed foundational AI training as of March 31, 2026. Singtel aims for all employees to complete basic AI literacy training, while targeting 25% of its workforce to become AI practitioners and 2.5% to become AI specialists.
Returns remain part of the plan
Lang says Singtel intends to retain its three-pronged shareholder-return framework as it steps up investment.
The company will continue targeting a core dividend payout of 70% to 90% of underlying net profit. It also plans to pay a value-realisation dividend of 3 cents to 6 cents per share through FY2030 and execute up to $1 billion of its $2 billion share-buyback programme in FY2027.
Singtel has recycled close to $6 billion of assets since April 2024, exceeding half of its $9 billion medium-term target. The remaining proceeds will be allocated between shareholder returns and growth investments, including the STT GDC acquisition, says Lang.
The proposed REIT or another permanent capital vehicle would provide Singtel with another way to fund capital-intensive infrastructure expansion as it approaches the final year of Singtel28, while preserving flexibility in how it recycles assets and deploys capital.
As at 11 am, shares in Singtel are trading at $4.44 flat.
