Singapore DC S-REITs Post Record Returns on AI Infrastructure Surge
Keppel DC REIT leads with 55% distributable income surge as hyperscalers drive demand. Singapore's sub-1% vacancy enables 35-50% rack rate premiums, reshaping Asia's data center investment landscape.
Singapore's three pure-play data center real estate investment trusts (REITs) delivered record financial results for the period ended December 2025, driven by surging demand for AI infrastructure from global technology giants.
Keppel DC REIT Leads With Record Distributable Income
Keppel DC REIT reported the strongest performance among the group. Distributable income surged 55.2% year-on-year, with distribution per unit reaching a record SG$0.10381 (US$0.077), up 9.8%. Gross revenue grew 42.2%, supported by SG$1.1 billion (US$820 million) in acquisitions across Tokyo and Singapore.
Rental income from hyperscalers, including Google, AWS, Microsoft, and Meta, rose to 69.3% of total rental income, up from 61.1% a year earlier. Portfolio occupancy held at 95.8%, with rental reversions of 45%. Keppel DC REIT management attributed the results to "continued cloud adoption, rapid digitalisation, and scaling of AI workloads."
NTT DC REIT and Digital Core REIT Report Stable Gains
NTT DC REIT, which listed on the Singapore Exchange in July 2025 raising approximately US$773 million, reported nine-month revenue of US$106 million, 1.7% above its IPO forecast. Committed portfolio occupancy reached 97.3%, with rent reversions of 9.2%.
Mission MediaDigital Core REIT posted 1.9% distributable income growth, signing new leases worth US$26 million in annualized rental revenue and achieving 31% cash rental reversions. A 10-year lease signed at its Virginia facility carried a 35% rent increase. Its sponsor pipeline is valued at over US$15 billion, positioning it for potential future growth.
DBS Group Research maintained "buy" ratings on all three REITs. Analyst Dale Lai noted that "Keppel DC REIT's earnings visibility is supported by high occupancy and a weighted average lease expiry of 6.7 years," adding that falling interest rates are expected to reduce financing costs.
Supply Constraints and Macro Demand Drive Pricing Power
Singapore's colocation vacancy rate remains below 1%, enabling rack rate premiums of 35% to 50% above regional peers. Hyperscalers are pre-leasing entire data halls up to two years before completion.
Global hyperscale capital expenditure for 2026 is forecast to exceed US$400 billion, with the broader AI infrastructure market projected to reach US$600 to US$700 billion. Singapore's AI data center market was valued at US$0.81 billion in 2025, with colocation facilities growing at an 11.78% compound annual rate.
Singapore Budget 2026 committed SG$37 billion (~US$27.6 billion) to AI research, grants, and the National AI Council, reinforcing structural demand for data center capacity across the island.
Investor Confidence Builds Across Retail and Institutional Segments
Retail investors recorded approximately SG$40 million (~US$29.8 million) in net inflows into the three DC S-REITs through February 2026. Fitch Ratings upgraded its data center REIT sector outlook to "improving" in December 2025, making it one of only two REIT subsectors to receive a positive revision.
DBS Group Research set target prices of SG$2.60 (~US$1.94) for Keppel DC REIT, US$1.20 for NTT DC REIT, and US$0.70 for Digital Core REIT.
Want to stay up-to-date on the stories shaping Asia's media, marketing, and comms industry? Subscribe to Mission Media for exclusive insights, campaign deep-dives, and actionable intel.
