Core Viewpoint - Microsoft has introduced a "Community-First AI Infrastructure" plan consisting of five pillars to address local concerns regarding its growing data center presence [1] Group 1 - The plan aims to alleviate community concerns about the environmental and social impacts of data centers [1] - Microsoft is focusing on transparency, collaboration, and investment in local communities as part of this initiative [1] - The announcement is timely, coinciding with increasing scrutiny on tech companies' data center expansions [1]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **European Real Estate** sector, discussing its outlook for 2026 and the performance of various sub-sectors including **Healthcare**, **Industrial/Logistics**, and **Offices** [2][17]. Core Insights and Arguments 1. **Recovery in Asset Values**: The recovery in asset values is underway, but the listed sector has not yet fully reflected this, with significant divergences in stock performance [2][18]. 2. **Sector Valuation**: The European real estate sector is currently trading at a **32% discount** to FY25e EPRA NTA, which is wider than the long-term average of approximately **10%** [7][60]. 3. **Earnings Growth**: Overall earnings in the real estate sector are still in growth mode, although there are varying performances across different segments [21][67]. 4. **AI Impact**: Artificial Intelligence (AI) is driving demand in Data Centres and Offices, with AI firms accounting for **22%** of office take-up in London in 2025, up from **2%** in 2012 [3][27]. 5. **Healthcare Demand**: The demographic shift towards an aging population is creating substantial demand for healthcare services, but supply has not kept pace. Aedifica is positioned to benefit from this trend through its merger with Cofinimmo [4][52]. 6. **Industrial/Logistics Recovery**: The industrial/logistics sector is showing signs of recovery, with new space requirements at their highest since the 2022 downturn. CTP is highlighted as a top pick in this space [5][48]. 7. **Mixed Macro Signals**: The macroeconomic environment is mixed, with rate cuts from central banks aiding funding costs, but rising long-term bond yields pose a headwind for the sector [20][21]. Stock Recommendations - **Outperform Ratings**: The following stocks are rated as Outperform due to their growth potential: - Aedifica - CTP - Gecina - Landsec - TAG - British Land - Merlin Properties - NEPI Rockcastle - Segro [8][67]. - **Market-Perform Ratings**: WDP has been upgraded to Market-Perform, while Covivio has been downgraded to Market-Perform due to valuation concerns [8][68]. Additional Important Insights 1. **Occupancy Trends**: Occupancy rates are improving across various sectors, with a notable recovery in operator profitability in healthcare [4][51]. 2. **Retail Sector Performance**: The retail sector remains strong, with tightening vacancy rates and growing prime rents, particularly in retail parks [39][40]. 3. **Valuation Metrics**: The average recurring EPS yield for the sector is **7.7%**, which is above the long-term average, indicating potential value for investors [7][64]. 4. **Geopolitical Factors**: Geopolitical uncertainties and macroeconomic conditions are influencing tenant demand and investment strategies across Europe [47][55]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the European real estate sector.

Group 1 - Pure Data Centres Group (Pure DC), backed by Oaktree, will invest over €1 billion ($1.17 billion) in developing a 78MW data centre campus in Westpoort, Amsterdam, which has been fully leased to a hyperscale customer, marking it as the largest stand-alone hyperscale data centre lease in Europe for the year [1][2] - The planned campus, named AMS01, will consist of three 85m towers, each housing 26MW of data halls, with construction scheduled to begin in January 2026 [2] - The data centre is designed to achieve a power usage effectiveness (PUE) of 1.2, aligning with Dutch energy efficiency targets [2][3] Group 2 - Pure DC CEO Dawn Childs highlighted Amsterdam as a constrained market for digital infrastructure, emphasizing the company's capability to provide low-latency, high-quality capacity [3] - The company recently secured final planning approval for phase one of its €400 million Madrid campus, which will ultimately offer up to 70MW of capacity [3][4] - The Madrid site, designated as MAD01, will include a 30MW data centre and a dedicated substation, with initial work focusing on high-voltage power line installation [4]

Core Insights - Digita Group has reached an agreement to be acquired by GI Partners, marking a significant transition for the company as it continues to operate independently within GI Partners' portfolio [1][3][4] - Under the previous ownership of DigitalBridge, Digita expanded its tower sites from approximately 200 to over 950 and enhanced its Data Centre and IoT platforms [2][5] - The acquisition is expected to close in the first quarter of 2026, with financial advisement provided by Houlihan Lokey for DigitalBridge and Rothschild & Co. for GI Partners [4] Company Overview - Digita Group, operating as Digita Oy in Finland and IslandsTurnar in Iceland, is one of the largest independent tower companies in the Nordics, with a nationwide portfolio of over 950 tower sites [1][5] - The company plays a crucial role in providing communication and connectivity services, partnering with Yle, Finland's public broadcaster, and serving millions through its telecom infrastructure [5] Investment and Growth Strategy - The new partnership with GI Partners is expected to support Digita's management team in the next stage of growth, focusing on expanding its independent tower operations and enhancing its data centre and IoT networks [3][7] - GI Partners has a strong background in investing in digital infrastructure, managing over $49 billion in assets, which positions them well to support Digita's future growth [6][7]

Core Insights - The earnings season highlights the diverse performance across Singapore's REIT sector, with data centres showing strong demand while prime offices adapt to changing work trends [1][2] Keppel DC REIT - Keppel DC REIT reported a significant gross revenue increase of 37.7% YoY to S$322.4 million for 9M2025, driven by acquisitions and contract renewals [3] - Distribution per unit (DPU) rose 8.8% YoY to S$0.0767, but adjusted DPU, excluding dilution from capital raising, only increased by 11.7% YoY to S$0.07872 [4] - The portfolio occupancy rate remained healthy at 95.8%, with a weighted average lease expiry (WALE) of 6.7 years, indicating stability [4] - The REIT is actively reshaping its portfolio with new acquisitions and asset enhancement initiatives expected to generate additional income [5] OUE REIT - OUE REIT's revenue fell 5.8% YoY to S$70.5 million for Q3 2025, primarily due to the divestment of Lippo Plaza Shanghai, but like-for-like growth showed resilience with a 1.2% revenue increase [6][7] - The DPU for the first half of 2025 was S$0.010, up 5.4% YoY, while the Singapore office portfolio maintained a committed occupancy of 95.3% [7] - The hospitality segment experienced a revenue per available room decline of 5.7% YoY, but finance costs decreased significantly by 19.7% to S$21.6 million [9] Suntec REIT - Suntec REIT achieved a DPU growth of 12.5% YoY to S$0.018 despite a slight revenue decline of 0.2% to S$117.5 million for Q3 2025, showcasing effective cost management [10][11] - Committed occupancy rates were robust at 98.5% for Singapore offices and 99.3% for retail, indicating strong demand [11] - Positive rental reversion rates of 8.5% for Singapore offices and 8.6% for retail suggest continued pricing power for landlords [12]

Group 1 - Spending on new UK data centres is projected to reach £10 billion annually by 2029, representing a more than five-fold increase from £1.75 billion spent in 2023 [1] - Investment in the UK data centre sector is being driven by AI demand, with tech giants expected to invest £25 billion over the next five years and nearly 100 new data centre projects planned [2] - The largest planned data centre project in the UK is a $13 billion "hyperscale" facility in North East England proposed by Blackstone, indicating a shift in development beyond London [3] Group 2 - The surge in global data centre demand and projects has been significantly influenced by the release of ChatGPT in late 2022, as investments in generative AI are anticipated to transform work and life [4]

Core Insights - Alphabet Inc's Google is set to invest $10 billion in establishing a 1-gigawatt data center in Andhra Pradesh, India [1] Investment Details - The investment amount is $10 billion, indicating a significant commitment to infrastructure development in the region [1] - The data center will have a capacity of 1 gigawatt, highlighting the scale of the project [1]

Core Insights - The European Union is actively working to reduce reliance on US Big Tech by developing sovereign cloud solutions in collaboration with local partners in countries like France and Norway [1][2] - The UK is becoming increasingly viewed as a satellite of US tech dominance, raising concerns about data sovereignty and the implications for local businesses [2][10] - The recent UK-US Tech Prosperity Deal aims to enhance the UK's tech ecosystem by providing access to US datasets, infrastructure, and collaborative research opportunities [6][7] Investment and Infrastructure - Significant investments from US tech companies include a $30 billion commitment from Microsoft for a supercomputer, a $5 billion investment from Google for a new data center, and additional investments from CoreWeave and others [5] - The focus of these investments is primarily on data center construction, which creates jobs mainly during the build-out phase rather than in ongoing management [3] - Concerns have been raised about the potential diversion of local energy and water resources to support these large-scale data centers [3] Digital Sovereignty and Business Implications - Digital sovereignty is becoming a critical issue for UK businesses, with 73% of SMEs expressing concerns about data being stored in the US [10][12] - The US Cloud Act allows US law enforcement to access data stored overseas by US companies, further complicating the data sovereignty landscape [11] - Trust in data sovereignty is increasingly influencing procurement decisions and customer relationships, with local providers seen as more reliable [13][14] Opportunities for UK Tech - There is a growing opportunity for UK companies to establish themselves as sovereign AI infrastructure providers, as digital sovereignty becomes a priority for businesses [15][16] - The demand for local and sovereign infrastructure is expected to remain strong, particularly among enterprises in Europe and the Middle East [17][19] - UK businesses are encouraged to focus on innovation and building local capabilities to compete with US tech giants [24][25]

Core Insights - The REITs sector in Singapore is experiencing a dynamic environment influenced by interest rate volatility, changing tenant needs, and structural trends like digitisation, leading to varying fortunes across different sectors [1][2] Group 1: Keppel DC REIT - Keppel DC REIT reported a 12.8% year-on-year increase in distribution per unit (DPU) to S$0.05133 for the first half of 2025, with gross revenue rising 34.4% to S$211.3 million and net property income increasing 37.8% to S$182.8 million [3] - The REIT is acquiring a 98.47% stake in Tokyo Data Centre 3 for approximately S$707 million, which is expected to be 2.8% DPU-accretive and enhances its position in the Asia Pacific data centre market [4][5] - With AI workloads projected to account for 70% of global data centre demand by 2030, Keppel DC REIT is well-positioned to benefit from these structural tailwinds [6] Group 2: Keppel REIT - Keppel REIT made a strategic acquisition of a 75% stake in Top Ryde City Shopping Centre in Sydney for approximately S$334.8 million, yielding an initial property yield of 6.7% and a 1.34% pro forma DPU accretion [7] - Following this acquisition, Keppel REIT's portfolio will expand to S$9.8 billion across 14 properties, with office assets making up 95.8% and retail assets 4.2% [8] - For the first half of 2025, Keppel REIT's property income rose 9.1% year-on-year to S$136.5 million, while net property income surged 11.8% to S$108.3 million, despite a 2.9% decline in DPU to S$0.0272 [9] Group 3: Lendlease Global Commercial REIT (LREIT) - LREIT agreed to divest the Jem office component for S$462 million, which will reduce its gearing from 42.6% to approximately 35%, strengthening its capital structure [11] - As of June 30, 2025, LREIT's total assets under management were S$3.76 billion, with gross revenue declining 6.5% year-on-year to S$206.5 million and net property income falling 10.0% to S$148.8 million [12] - Despite revenue challenges, LREIT maintains solid portfolio fundamentals with a committed occupancy of 92.1% and positive retail rental reversion of 10.2% for the year [13] Group 4: Investment Outlook - The three Singapore REITs present different value propositions for income investors, with Keppel DC REIT focusing on growth, Keppel REIT showing operational strength but facing office market risks, and LREIT prioritizing balance sheet repair over growth [14][15] - All three REITs share the ability to deliver steady income, making them appealing for investors looking for reliable payers [15]

Core Insights - TeraWulf Inc., a US-based crypto mining firm, is planning to raise approximately $3 billion to expand its data centers, with support from Google Inc. [1] Company Summary - TeraWulf Inc. is focused on expanding its operations in the cryptocurrency mining sector [1]. - The funding initiative is significant, indicating the company's ambition to enhance its infrastructure and capacity [1]. Industry Context - The backing from Google Inc. highlights the growing interest and investment in the cryptocurrency mining industry [1]. - The arrangement with Morgan Stanley suggests a strategic approach to securing substantial financial resources for expansion [1].