$NTT DC REIT USD(NTDU.SG)NTT DC REIT: Better Fee Alignment, but Is It the Best Data Centre REIT?The manager plans to lin…

$NTT DC REIT USD(NTDU.SG)

NTT DC REIT: Better Fee Alignment, but Is It the Best Data Centre REIT?

The manager plans to link performance fees to DPU growth and issue management-fee units at no less than NAV. It also proposes waiving FY2026/27 performance fees if DPU falls below US$0.078 and capping fees at US$3.726 million. These measures could reduce misaligned incentives and unnecessary dilution, although sustainable DPU growth remains the real test.

Fundamentals and valuations

NTT reported FY2025/26 revenue of US$164.8 million, net property income of US$74.9 million and DPU of 5.56 US cents, exceeding IPO forecasts. Gearing stood at 29.2%, with occupancy reaching 98.5% in Q4.

As of August 2026, NTT traded at approximately 0.8 times book value with a 5.9% distribution yield. Keppel DC REIT traded at 1.3 times book with a 5.0% yield, while Digital Core REIT offered a 7.1% yield at 0.6 times book.

Technicals and peer comparison

NTT closed at US$0.935 on October 8, below its US$1 IPO price, reflecting weak price momentum despite encouraging fundamentals. Current moving-average and RSI signals should be checked before confirming a technical reversal.

Keppel DC REIT stands out for operating momentum, with 1H26 DPU growth of 11.3%. Digital Core REIT offers the highest yield but carries greater balance-sheet risk, with gearing of 39.2% and flat 1H26 DPU.

Investment verdict

NTT could appeal to value investors seeking a discount to NAV, relatively low gearing and improved management alignment. However, Keppel DC REIT looks more compelling for investors prioritising distribution growth and financial resilience. Digital Core REIT suits income seekers willing to accept greater risk.

Ultimately, NTT’s fee reform is encouraging, but investors should demand evidence of sustainable DPU growth before treating its valuation discount as a bargain.