S$3.5 Billion for 42 MW: Who Gets Paid While a Singapore Data Hall’s Land Lease Runs Down

On 22 October, unitholders of Digital Core REIT voted 99.92% in favour of a deal that, among other things, buys the trust its first piece of Singapore: 2.5% of one data centre in Loyang, for about S$87.4 million. That small slice prices the whole building at about S$3.5 billion, for 42 megawatts of computer capacity. That is more than twice what the same valuer puts on a megawatt in Virginia, Osaka or Toronto. The papers behind the deal also show what holds that price up. The customers in the hall pay far below today’s market. And the building sits on government land leased for 30 years, with no renewal written in. The stuck step is the land lease.

SINGAPORE PULSE · AI DATA CENTERS · Data as at 30 Oct 2026 · Next update: deal completion and Digital Core REIT full-year results, early 2027
Affects: AI Data Centers · Digital Core REIT · Digital Realty — Markets: Singapore · US · Malaysia

Education only, not advice to buy or sell any security. Valuations and lease facts are as published in Digital Core REIT’s 7 October circular; results as published on 27 October. Singapore dollar (S$) and US dollar (US$) figures are as the REIT reported them. Our own sums are labelled.

The numbers that matter this week

Digital Core REIT circular (7 Oct 2026) and 3Q26 update (27 Oct 2026). Per-megawatt figures are our arithmetic from the valuers’ 100% values and IT capacity. Status chips are Second Order’s read.

On this page: Why it matters · The hall · The price · Old leases · The land lease · The quarter · The funding · Power this week · Our math · Who gets paid · What is stuck? · Dates next · FAQ

Why does a 2.5% slice of one hall matter?

Because it is rare to see a published price on a single Singapore data centre. When a slice does trade, and the seller has to publish two independent valuations to get the deal past unitholders, you get a clear look at what a working Singapore megawatt is worth today, and why (what is an AI data center?).

Singapore is one of Asia’s main data centre hubs, but it has had to ration new building because data centres use a lot of power and land on a small island. New capacity is handed out in small rounds, and from 2027 large halls will also need a licence (the Singapore licence Pulse). The government’s new power plan expects peak demand to keep rising, and new halls have to bring green power with them (the Singapore power plan Pulse).

When new supply is held back like that, the halls already built and powered become the scarce thing. Their owners can charge more when leases come up. That is good for whoever owns them. But there is one condition that a buyer of a Singapore hall cannot get around: the land under it is leased from the state for a fixed number of years. So the chain looks like this.

What exactly is Digital Core buying?

Digital Core REIT is a trust listed on the Singapore Exchange. It owns stakes in data centres and pays out the income to its unitholders in US dollars. Its sponsor is Digital Realty, one of the world’s biggest data centre landlords, and the company that manages the trust is a wholly owned subsidiary of Digital Realty (what Digital Core REIT does; what Digital Realty does). Until now, despite its Singapore listing, it owned no Singapore buildings. Most of its halls are in Northern Virginia, Silicon Valley, Frankfurt and Osaka.

The deal it announced on 12 August has five parts, all with Digital Realty on the other side. The trust sells its 90% stakes in a Toronto hall and a Los Angeles hall, and 39% of a Northern Virginia hall at 8217 Linton Hall Road. It buys a further 25% of a hall in Osaka, taking it to 45%, and 2.5% of a hall in Singapore. The sales raise about US$316 million; the two purchases cost about US$176 million. Digital Realty asked for all five parts to be voted on as one.

The Singapore hall is SIN12, at 11 Loyang Close, in an industrial area in the north-east of the island close to the Changi North cable landing station, where undersea internet cables come ashore. It is part of Digital Realty’s Loyang campus. It was finished in 2021, has five storeys, and holds ten data halls with 42.1 megawatts of critical IT capacity (the power available for the computers themselves). Its power and cooling systems are built with full backup, which the valuer describes as a 2N design.

At 30 June it was 94% leased to more than 30 customers, with an average of about three years and four months left on their leases. The three biggest each take between 9 and 10 megawatts. The valuer describes them as an international cloud computing company, a global short-form video platform and a Singaporean multinational technology company. Only the cloud company has an investment-grade credit rating; five other investment-grade tenants together take 13.3 megawatts.

Digital Core’s 2.5% is tiny. After the deal, Singapore will be about 4% of the trust’s assets, against 52% in North America, 26% in Germany and 18% in Japan. But the trust gets a joint-venture agreement with Digital Realty over the company that owns the hall and, on our read, a foot in the door for later stakes and the right to say it owns Singapore data centre capacity. Our earlier Analysis looked at what the unit price assumes about the whole trust (the Digital Core REIT Analysis). This Pulse looks at the Singapore hall itself, using the valuers’ own pages.

What is the hall worth, and why so much?

Two independent valuers looked at SIN12. Cushman & Wakefield put it at S$3,496 million as at 30 June. Newmark put it at S$3,500 million as at 1 June. In US dollars that is about US$2.7 billion. Digital Core’s 2.5% costs about S$87.4 million, in line with both.

Divide by the computer capacity and the Singapore hall comes out at about S$83 million, or about US$64 million, per megawatt (our arithmetic). Cushman & Wakefield, which valued all four halls in the chart below, put the Linton Hall building in Northern Virginia at US$276 million for 10.8 megawatts, about US$26 million per megawatt. The Osaka hall comes out at about US$22 million per megawatt, and Toronto at about US$21 million (our arithmetic in each case, from the valuers’ figures at 100%).

These halls are not all the same. Some are fitted out for customers and some are shells, they sit on different land terms and their leases run for different lengths of time. But a gap of more than two times is not about finishes. It is about scarcity. Building a new hall in Northern Virginia is slow because of power, as our Virginia pieces showed (Virginia’s first power). In Singapore, new halls need a government allocation, green power and, soon, a licence. A working hall with power already connected is worth a lot more when the next one is that hard to get (how much it costs to build an AI data center).

The valuers say so in plain terms. Cushman & Wakefield lists Singapore’s “severe power and capacity constraints” and limited new supply among the reasons it assumes tenants will renew. Newmark cites Singapore’s constrained data centre supply and power environment.

Why do customers in the hall pay so little today?

Because they signed years ago, before the squeeze. The valuer says the hall’s contract rents are more than 30% below market, because the leases for the larger customers were signed several years back, while severe power limits in Singapore have pushed market rates up sharply since. A data centre lease usually fixes the price per kilowatt for years at a time, with small yearly steps (data center leases explained).

The interesting line is what happens when those leases end. The valuer says several of the larger customers have extended, or are in the process of extending, at a starting rate nearly twice as high as what they pay now. Moving out is hard: a customer with 4.5 to 10 megawatts of servers in one place faces large costs to move, and in Singapore there is little spare capacity to move to.

Even before those extensions, the hall earns a lot per kilowatt. The valuer’s average contract figure for SIN12 is roughly twice the starting rate on the new ten-year Virginia lease at Linton Hall, on our reading of the two valuation certificates.

So the money in this hall comes in two waves. The first is today’s leases, already well paid. The second is the renewals over the next few years, as leases with about three years and four months left on average come up and reset closer to market. That second wave is what the valuers are pricing. Keppel DC REIT showed the same thing on its own Singapore halls this month, with rates on renewed leases up about 16% in the third quarter (the Keppel DC REIT quarter).

The valuers do not count that second wave as free money. In its direct method, Cushman & Wakefield takes S$313.7 million off the value of the hall at full rent to cover the time and cost of filling the rest of the power and bringing rents up to market. Newmark takes S$169 million off. Both expect the hall to earn more than S$180 million a year once it gets there: S$197.4 million in Cushman & Wakefield’s case and S$184.5 million in Newmark’s.

Why is the land lease the bind?

In Singapore, most industrial land is owned by the state and leased out through JTC, the government agency for industrial estates. SIN12 is no different. The land is owned by the state and leased to JTC until 2112. JTC in turn leases it to the company that owns the hall for 30 years from 9 March 2019, for data centre use only. The owner paid a land premium up front for the whole 30 years, and pays no yearly ground rent.

That means the lease ends on 8 March 2049, about 22 years from now. The valuer notes that no extension options are written into the agreement. It says renewals of ground leases are fairly common in Singapore as long as the owner meets certain conditions, and that it is reasonable to assume this one will be renewed. But it also says it has allowed for some risk that it is not.

This is not a small detail in the price. Both valuers worked out the value twice, once assuming JTC renews the lease and once assuming it does not. Cushman & Wakefield got S$3,681 million with renewal and S$2,940 million without, a gap of S$741 million. Newmark got S$3,585 million with renewal and S$2,607 million without, a gap of S$978 million (our arithmetic for the gaps). Then each blended them. Cushman & Wakefield gave renewal a 75% weight. Newmark gave its renewal case 70%, its simpler direct method 20% and no renewal 10%.

In plain terms: about a fifth of what Digital Core is paying for its slice rests on a decision JTC will make some time before 2049. If the renewal were certain, the hall would be worth about 5% more on Cushman & Wakefield’s numbers. If it were a coin toss, it would be worth about 5% less (our arithmetic).

Why would JTC not renew? Nobody is saying it won’t. The circular says market participants do not usually value Singapore data centres as if they stop at the end of the first land lease, given the money sunk in them, the cost to customers of moving, and JTC’s established renewal process. But renewal is not written in, and the state has become much more careful about what data centres it lets onto the island. Its new rules link capacity to energy efficiency and green power, and from 2027 a licence will turn promises made to win capacity into licence conditions. On our read, an owner asking JTC for another lease in the 2040s will be asked what the hall does for Singapore, not just whether it pays.

That is the second-order point. The same scarcity that makes the hall valuable is created by the government that holds the land. JTC already has its money for the first 30 years. The owner keeps the hall full and pays its bills. But the long tail of the hall’s value depends on a body whose job is to decide what Singapore’s land is for.

What did Digital Core report on 27 October?

Its third-quarter business update, filed on the Singapore Exchange after trading on 27 October, was the first since the vote. For the first nine months, revenue was US$134.5 million, up 1.6% from a year earlier. Net property income (rental income after property costs) fell 4.3% to US$64.8 million and distributable income fell 1.1% to US$34.8 million. The trust put the drop down to Linton Hall, which has been empty and under rebuild.

For the first time, it gave guidance for the year ahead. It expects to pay 4.15 to 4.25 US cents per unit in 2027, against 3.60 US cents over the last twelve months, an increase of about 15% to 18% (our arithmetic). It expects an average interest rate of 3.25% to 3.75%, occupancy within half a percentage point of today, and renewals at rates up in the mid single digits. It said actual results may differ materially.

Most of that increase is the Linton Hall lease. The building in Northern Virginia was emptied in June 2025 and has been rebuilt with new power supplies, power distribution units, pipes and raised floors. A ten-year lease with an investment-grade cloud company, signed in January, starts on 1 December 2026. Chief executive John Stewart told the results call that the rebuild is on track and on budget, The Business Times reported. When the lease was signed, the trust said it would bring in about US$14.8 million a year of net property income for the whole building. Our sponsor Pulse showed how Digital Realty itself is waiting on handover dates across its US halls (the Digital Realty Pulse).

The balance sheet moved the other way in the quarter. Aggregate leverage, the trust’s debt measured against its assets under Singapore’s REIT rules, rose to 41.6% at 30 September from 39.2% at 30 June. Borrowings were US$783.9 million against US$670.5 million at December, as it paid for the Linton Hall work and bought back units. The share of debt at fixed rates fell to 64% from 70%. Interest cover was 3.1 times; the trust says it would be 2.3 times if rates rose by one percentage point. There are no debt maturities until December 2027.

Net asset value per unit was US$0.77 at 30 September, against a unit price of US$0.455 that day. The trust has bought back 27.4 million units this year at an average of US$0.502. It says the deal brings leverage down to about 37.6%, with about US$450 million of room before the 50% limit.

How does the deal pay for the Singapore slice?

The circular says the trust will use the roughly US$316 million from the three sales, plus US$176 million worth of new Singapore dollar and Japanese yen loans, to pay for the two purchases, repay about US$117 million of euro and US dollar debt, spend up to US$20 million on buying back units, and cover about US$2.5 million of costs. Borrowing in the same currency as the building means the income and the interest move together.

The first piece of that borrowing was priced on 27 October: ¥5 billion (about US$31 million) of five-year notes at a fixed 3.47%, issued on 4 November 2026 and due on 4 November 2031, for the Osaka stake, PropertyAtlas reported. The Singapore purchase cannot complete until the trust has the money in hand from third-party financing or other sources; that is one of the written conditions in the purchase agreement.

There are also fees. The trust pays its manager an acquisition fee of about US$1.8 million (1% of the two purchase prices) and a divestment fee of about US$1.6 million (0.5% of the sale prices), both in new units. Because the manager is owned by Digital Realty, the sponsor is paid on both sides of the deal it designed. Digital Realty’s group has a deemed interest in about 418.5 million units, 32.78% of the trust, according to the circular. Those units could not vote on the deal, because it is a related-party transaction.

What else moved in Singapore’s data centre power this week?

The scarcity behind SIN12’s price showed up again during Singapore International Energy Week. On 30 October DayOne, a Singapore-headquartered operator, signed an agreement with Blue Whale Energy to study linking battery storage at its upcoming SG1 data centre with batteries at other commercial sites, so they can act as one resource for the grid at peak times. The aim, the companies said, is to make better use of existing grid capacity and reduce the need for costly grid upgrades. It is a study, not a build. Operators in Malaysia face a similar push to pay for what they book (Malaysia’s unused-power charge).

In the same week Nxera, Singtel’s data centre arm, signed an agreement with Sembcorp to look at low-carbon power for its Singapore halls, including hydrogen, biomethane, solar on buildings and imports from a floating solar project in Johor, and DayOne said it works with Sembcorp on its own power plans, Light Reading reported. Both are non-binding. They show where the effort is going: into finding power for the next hall (what Nxera does). Until that power exists at scale, the halls already running keep their pricing power, and the land under them keeps its importance.

Our math, in plain sums

• Singapore per megawatt: S$3,496 million ÷ 42.1 MW = about S$83 million; about US$2,703 million ÷ 42.1 MW = about US$64 million (our arithmetic, Cushman & Wakefield value at 100%).
• Virginia per megawatt: US$276 million ÷ 10.8 MW = about US$26 million. Osaka: about US$438 million ÷ 19.9 MW = about US$22 million. Toronto: US$141 million ÷ 6.77 MW = about US$21 million (our arithmetic).
• Singapore against Virginia: US$64 million ÷ US$26 million = about 2.5 times per megawatt (our arithmetic).
• Land lease gap: S$3,681 million − S$2,940 million = S$741 million (Cushman & Wakefield); S$3,585 million − S$2,607 million = S$978 million (Newmark) (our arithmetic).
• Blend check: 75% × S$3,681 million + 25% × S$2,940 million = about S$3,496 million, the final value (our arithmetic).
• Share of value tied to renewal: S$741 million ÷ S$3,496 million = about 21%; on Digital Core’s 2.5%, about S$18.5 million of the S$87.4 million (our arithmetic).
• If renewal were certain: S$3,681 million ÷ S$3,496 million = about 5% more. At 50/50: about S$3,311 million, about 5% less (our arithmetic).
• Income yield once full: stabilised income of S$197.4 million ÷ S$3,496 million = about 5.6% a year on the valuation (our arithmetic).
• 2027 payout guide: 4.15 to 4.25 US cents ÷ 3.60 US cents = about 15% to 18% more (our arithmetic).

What this tells you: the Singapore hall is priced for scarcity. A large part of the price comes from rents that have not yet been reset, and from years of income after 2049 that need a new land lease. Both are likely. Neither is fully signed.

Who gets paid first?

First, JTC and the state — already. The land premium for the first 30 years was paid up front. JTC has no money at risk in the hall, and it holds the one decision that can change the hall’s value the most: whether to grant another lease.

Second, Digital Realty — in cash and fees, now. It sells a 2.5% slice for about S$87.4 million at a value that counts on renewal, keeps 97.5% and control, buys back stakes in its own North American halls, and through the manager it owns collects about US$3.4 million in fees on the deal (our sum of the two fees). It also holds about a third of the trust that pays it.

Third, the customers on old leases — by saving, for now. While their contracts run, they pay more than 30% below market. That saving ends at renewal, when the valuer says the big ones are signing on at nearly twice the old rate.

Fourth, the lenders — on schedule. New Singapore dollar and yen loans fund the purchases; the yen notes pay a fixed 3.47% from 4 November. Interest is paid every period whether or not rents reset on time.

Waiting: Digital Core’s unitholders. They are promised more income in 2027, mostly from the Virginia lease, and a small share of Singapore’s scarcity through the 2.5%. Their units traded at about 60% of book value at the end of September. The trust only collects the second wave of Singapore money if leases reset as the valuer expects, and it only keeps the long tail if the land lease is renewed (how data centers are financed).

One-line rule: around a scarce Singapore data hall, whoever holds the land and whoever sells the slice are paid first, customers on old leases save until renewal, and the buyer of the slice waits on two clocks: the tenants’ renewals and the land lease.

So what is the stuck step?

The land lease: the fixed-term state land lease under most Singapore data centres, which in SIN12’s case ends in March 2049 with no renewal written in. Not demand, which keeps the hall 94% full. Not price, which is moving up at renewal. Not the building, which is new. Four things make it stick:

• The state owns the land. Most Singapore data centres sit on industrial land leased from the state through JTC, so the owner of the building does not own the ground under it.
• The lease is fixed. Thirty years from 2019, data centre use only, with the premium paid up front and no extension option in the agreement.
• Renewal is a policy decision. Singapore now links new capacity to efficiency, green power and licence conditions; on our read, an owner asking for more years will be judged on similar terms.
• The value is in the long tail. Both valuers’ numbers drop by S$741 million to S$978 million without renewal, so the land lease, not the tenants, sets the floor under the price.

This is the bind our stuck-step Analysis describes: when power is short, the bind moves to whoever controls the slowest permission. In Australia it was the power connection to a Melbourne hall (the NEXTDC Pulse). In Singapore, where the power and land are rationed by the state, it is the permission to stay on the land.

Which dates test this read next?

• 4 November 2026 — the ¥5 billion 3.47% notes are issued, the first piece of new borrowing for the deal.
• 1 December 2026 — the ten-year Linton Hall lease in Virginia is due to start, the main driver of the 2027 payout guide.
• By 31 December 2026 — expected completion of the deal, including the Singapore dollar borrowing and the SIN12 joint-venture agreement.
• Early 2027 — Digital Core REIT full-year 2026 results (last year’s came on 4 February): leverage after completion and the first income from Singapore.
• Around 2029 to 2030 — SIN12’s average lease term (three years and four months at 30 June 2026) runs out; this is when the big renewals reset.
• 8 March 2049 — the JTC land lease under SIN12 ends unless it is renewed.

What would change this view?

• JTC sets out renewal terms. If JTC publishes clear terms for renewing data centre land leases, the bind loosens and the gap between the two scenarios should narrow.
• Renewals reset as promised. If Digital Core or Digital Realty discloses SIN12 extensions at close to twice the old rate, the second wave is real and the bind sits only with the land.
• New supply opens up. If Singapore releases much more capacity, or Johor and Batam halls take the overflow, old Singapore halls lose some of their pricing power.
• Funding gets dearer. If the Singapore dollar loan prices well above the yen notes, or leverage stays near 41.6% after completion, the slice costs the trust more than it looks.

Practical takeaways

• Digital Core REIT is buying 2.5% of SIN12, a 42.1 MW Singapore hall, for about S$87.4 million; valuers put the whole hall at about S$3.5 billion
• That is about US$64 million per megawatt, about 2.5 times the same valuers’ figure for its Virginia hall (our arithmetic)
• Customers in the hall pay more than 30% below market; big ones are extending at nearly twice the old rate
• The JTC land lease ends in March 2049 with no renewal option written in; one valuer’s figures differ by S$741 million with and without renewal
• JTC and Digital Realty are paid first; customers on old leases save for now; unitholders wait; stuck step: the land lease

FAQ

What is Digital Core REIT buying in Singapore?
A 2.5% interest in the company that owns SIN12, a five-storey Digital Realty data centre at 11 Loyang Close in the north-east of Singapore, for about S$87.4 million (about US$67.6 million). The hall was finished in 2021, has 42.1 megawatts of IT capacity in ten data halls, and was 94% leased to more than 30 customers at 30 June 2026. Unitholders approved the deal on 22 October and it is expected to complete in the fourth quarter of 2026.

Why does the land lease matter so much?
The hall sits on land leased from JTC for 30 years from 9 March 2019, so the lease ends on 8 March 2049 with no renewal option written in. One valuer said the hall is worth S$3,681 million if the lease is renewed and S$2,940 million if it is not, a gap of S$741 million. Its final S$3,496 million value weights renewal at 75%. So about a fifth of the price rests on a renewal that is likely but not promised.

What is the stuck step?
The land lease. Singapore has little spare power and land for new data halls, so existing halls with leases and power in place are scarce and valuable, and their customers are paying well below today’s market. But every hall sits on a fixed-term government land lease, and the value of the cash flows after 2049 depends on JTC agreeing to renew it.

Is this investment advice?
No. Education only. It maps who gets paid and which step is stuck. It is not a recommendation to buy or sell any security, and we leave out price targets and ratings on purpose.

Keep reading on the map

• Singapore Markets hub — country page
• Keppel DC REIT’s renewals · Singapore’s power plan · 200 MW and a licence · Keppel DC REIT in Tokyo · The REIT listing door
• Digital Realty’s signed, not billed · NEXTDC’s power delay · A Johor data centre loan — other markets
• What does Digital Core REIT do? · What does Digital Realty do? · What does Keppel DC REIT do? · What does Nxera do? · What does Equinix do?
• Data center leases explained · Data center financing explained · Where are AI data centers located? · Hyperscale vs colocation · How long it takes to build one
• Digital Core REIT: the powered-hall step · Keppel DC REIT: the rebuild step · Where does the stuck step move?
• AI Data Centers on the stack · All Markets doors — Taiwan, Korea, US, China, Singapore, Australia, Malaysia

Not investment advice. Do your own research.

References

1. Digital Core REIT, 3Q26 business and operational update (SGX announcement and presentation), 27 Oct 2026. links.sgx.com — 2027 guidance, nine-month income, leverage, debt, buybacks, unit value and the portfolio table.
2. Digital Core REIT, circular to unitholders on the proposed transaction (SGX), 7 Oct 2026. links.sgx.com — the Singapore hall’s size, land lease, occupancy and tenants, both valuations and the land-lease scenarios, fees and funding.
3. Digital Core REIT, agreement to establish presence in Singapore, expand in Japan, sell interests in three North American assets, 12 Aug 2026. digitalcorereit.com — deal prices, net proceeds, debt repayment and the expected closing.
4. Digital Core REIT, Linton Hall lease-up, 5 Jan 2026. digitalcorereit.com — the 10-year Virginia lease starting 1 December 2026.
5. The Business Times, Digital Core Reit guides about 17% DPU growth for 2027, 27 Oct 2026. businesstimes.com.sg — the chief executive’s comments on the call and the expected fourth-quarter completion.
6. PropertyAtlas, Digital Core REIT 3Q2026 business update and yen notes, 27 Oct 2026. propertyatlas.sg — the terms of the ¥5 billion notes.
7. PropertyAtlas, Digital Core REIT EGM approves the portfolio transaction, 22 Oct 2026. propertyatlas.sg — the unitholder vote.
8. DayOne and Blue Whale Energy, distributed virtual power plant study in Singapore (PR Newswire), 30 Oct 2026. prnewswire.com — the battery study at DayOne’s SG1 site.
9. Light Reading, Power crunch drives DayOne, Nxera to separate deals with Sembcorp, 30 Oct 2026. lightreading.com — the Nxera and DayOne power agreements with Sembcorp during Singapore International Energy Week.