- NTT DC REIT (SGX:NTDU) delivered a steady 9M FY25/26 set of results in line with its IPO forecast, while leasing traction points to a stronger run-rate into 4Q FY25/26 (quarter ending March 2026).
- - Read this at SGinvestors.io -
- The operating narrative improved through the quarter, even though in-place occupancy eased to 94.6% at 3Q 25/26, but committed occupancy (including leases that were committed but have yet to commence) improved to 97.3%.
- In addition, healthy positive rental reversions in the quarter led to a +9.2% increase for 9M 25/26, significantly higher than the +5.1% in the previous quarter.
- - Read this at SGinvestors.io -
Our viiews.
- The near-term focus is less about balance sheet capacity and more about execution on backfill and timing of lease commencements, particularly across the CA1, CA2, and SG1. The uplift from committed occupancy to ~97.3% should provide a natural earnings upside into 4Q FY25/26, while the +9.2% rent reversion suggests pricing remains supportive.
- Although committed occupancy of 97.3% is slightly below IPO forecast of an occupancy rate of 97.6%, distributable income is in line with IPO projections, suggesting that rental rates and profit margins are ahead of forecasts. Assuming, margins remain above projections, we are likely to see FY25/26 earnings coming in ahead of IPO projections.
Maintain BUY.
- Read more at SGinvestors.io.
