SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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 <div class='content-caption'>Tenant breakdown</div>
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The data centre industry has experienced tremendous growth in the past 2 years, as businesses are faced with a sudden and increased need for greater cloud capacity to enable work-from-home arrangements.

According to Cushman &amp; Wakefield's 2022 Global Data Center Market Comparison report, the top 10 markets with the greatest capacity under development include London, Northern Virginia, Silicon Valley, Atlanta, Chicago, Dublin, Hong Kong, Phoenix, Singapore and Jakarta.

The report also highlighted the 3 main types of challenges and responsibilities that data centre operators face. These include the ability to source for renewable energy, the ability to develop better methods of cooling servers and the ability to design more efficient facilities to meet the sustainability goals of clients and governments. 
In Singapore, data centres accounted for 7 per cent of Singapore's total electricity consumption in 2020.

Earlier this year, the moratorium on new data centres in Singapore was lifted, with certain criteria on energy efficiency.

Minister for Trade and Industry, Gan Kim Yong had said that the government had "to find a way to manage the growth of data centres in a sustainable manner consistent with our climate change commitments". 
SGX lists several Reits with substantial data centre assets, including Mapletree Industrial Trust,  Ascendas Reit and 2 pure play data centre Reits - Keppel DC Reit and Digital Core Reit.  
Keppel DC Reit (KDCReit), Asia's first pure-play data centre Reit, has 21 properties located across 9 countries in Asia-Pacific and Europe.

The Reit also has the right of first refusal for S$2 billion of potential data centre assets for acquisitions through its sponsor, Keppel T&amp;T as well as Keppel's private data centre funds.

In its most recent FY21 results, KDCReit posted a record high portfolio occupancy of 98.3 per cent and announced distribution per unit (DPU) of 9.851 cents, representing a 7.4 per cent year-on-year growth.

The Reit has also committed to progressively reduce its combined Scope 1 and Scope 2 emissions with an aim to halve it by 2030 from a 2019 baseline.

It also aims to introduce renewable energy to at least 50 per cent of its colocation assets by 2030, as well as encourage the use of renewable energy at all other portfolio assets.

Digital Core Reit, which listed on the SGX in 2021, has a portfolio of 10 data centres across the United States and Canada.

The Reit's core strategy includes investing in high-quality assets with strategic locations generating long-term pricing power and well-maintained physical structure.

Digital Core Reit has projected a DPU of 4.18 US cents for FY2022 and guided for a 5.3 per cent DPU growth in FY2023.

The Reit has committed to delivering sustainable growth for all stakeholders and aims to reduce Scope 1 and 2 emissions by 68 per cent and Scope 3 emissions by 24 per cent by 2030. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/singapore-office-s-reits-poised-to-benefit-from-positive-rental-momentum-0"> </a><a href="https://www.businesstimes.com.sg/companies-markets/data-centre-s-reits-committed-to-sustainable-growth-0">read</a><a href="https://www.businesstimes.com.sg/companies-markets/singapore-office-s-reits-poised-to-benefit-from-positive-rental-momentum-0"> </a>the original version.
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    Tenant breakdown


The data centre industry has experienced tremendous growth in the past 2 years, as businesses are faced with a sudden and increased need for greater cloud capacity to enable work-from-home arrangements.

According to Cushman &amp; Wakefield's 2022 Global Data Center Market Comparison report, the top 10 markets with the greatest capacity under development include London, Northern Virginia, Silicon Valley, Atlanta, Chicago, Dublin, Hong Kong, Phoenix, Singapore and Jakarta.

The report also highlighted the 3 main types of challenges and responsibilities that data centre operators face. These include the ability to source for renewable energy, the ability to develop better methods of cooling servers and the ability to design more efficient facilities to meet the sustainability goals of clients and governments.  
In Singapore, data centres accounted for 7 per cent of Singapore's total electricity consumption in 2020.

Earlier this year, the moratorium on new data centres in Singapore was lifted, with certain criteria on energy efficiency.

Minister for Trade and Industry, Gan Kim Yong had said that the government had "to find a way to manage the growth of data centres in a sustainable manner consistent with our climate change commitments".  
SGX lists several Reits with substantial data centre assets, including Mapletree Industrial Trust,  Ascendas Reit and 2 pure play data centre Reits - Keppel DC Reit and Digital Core Reit.   
Keppel DC Reit (KDCReit), Asia's first pure-play data centre Reit, has 21 properties located across 9 countries in Asia-Pacific and Europe.

The Reit also has the right of first refusal for S$2 billion of potential data centre assets for acquisitions through its sponsor, Keppel T&amp;T as well as Keppel's private data centre funds.

In its most recent FY21 results, KDCReit posted a record high portfolio occupancy of 98.3 per cent and announced distribution per unit (DPU) of 9.851 cents, representing a 7.4 per cent year-on-year growth.

The Reit has also committed to progressively reduce its combined Scope 1 and Scope 2 emissions with an aim to halve it by 2030 from a 2019 baseline.

It also aims to introduce renewable energy to at least 50 per cent of its colocation assets by 2030, as well as encourage the use of renewable energy at all other portfolio assets.

Digital Core Reit, which listed on the SGX in 2021, has a portfolio of 10 data centres across the United States and Canada.

The Reit's core strategy includes investing in high-quality assets with strategic locations generating long-term pricing power and well-maintained physical structure.

Digital Core Reit has projected a DPU of 4.18 US cents for FY2022 and guided for a 5.3 per cent DPU growth in FY2023.

The Reit has committed to delivering sustainable growth for all stakeholders and aims to reduce Scope 1 and 2 emissions by 68 per cent and Scope 3 emissions by 24 per cent by 2030.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Data centre S-Reits committed to sustainable growth

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Cushman & Wakefield plc operates as a commercial real estate company. The Company develops commercial properties, as well as provides property leasing, facilities management, tenant representation, and valuation services. Cushman & Wakefield serves clients worldwide.

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REIT Watch - Data centre S-Reits committed to sustainable growth

The data centre industry has experienced tremendous growth in the past 2 years, as businesses are faced with a sudden and...

Singapore Exchange Ltd (SGX)

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