NTT Data Centre REIT (“NTT DCR”) IPO debut on July 14, 2025 was extremely disappointing. Its closing price on its first day of trading ended at a miserable US$1 per unit which was its IPO price. This is certainly unlike most of the SGX IPOs where prices usually surge by 10% on debut as many prospective investors are unable to get their hands on the shares during the IPO.
Anyway, it maybe a blessing in disguise for many folks who are unable to get their hands on NTT DCR. I really have doubts on the sustainability of the 7.5% distribution yield as I do not think the management will maintain a 100% payout ratio for the longer term and it is getting too gimmicky. Also, in my previous post, I have reiterated on the often forgotten point that the trust deed only permits not more than 9.8% shareholding by any investor (except for the sponsor 25% limit) which can have devastating consequences during crisis.
Parting Thoughts- Personal View
Despite the risks as aforesaid mentioned, if the price of NTT DCR were to drop more than 10%-20%, it may serve as a good entry point (with additional safety buffer) to accumulate some units at an attractive distribution yield.
No comments:
Post a Comment