PLDT Plans History-Making IPO for Data Center REIT

The single sharpest fact is this: for the first time, Filipinos may be able to invest in a REIT whose income comes from data centers. The physical backbone of cloud computing and AI, data centers are the behind-the-scenes heroes of the digital age. PLDT Inc. disclosed that VITRO Inc., a wholly owned subsidiary of ePLDT, submitted a registration statement and Real Estate Investment Trust (REIT) Plan with the Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO).

VITRO Inc. describes itself as the Philippines' pioneer in hyperscale-grade data centers. It was established under ePLDT in 2000 and has grown into one of the country's leading data center platforms. ePLDT is a wholly-owned subsidiary of PLDT that serves as its digital business arm. It provides enterprise technology services such as cloud, cybersecurity, artificial intelligence, managed IT, and data center solutions.

The proposed VITRO REIT is intended to provide a platform to unlock value from PLDT Group's stabilized digital infrastructure assets, broaden investor access to the country's growing digital infrastructure sector, and create a long-term and sustainable capital recycling platform that can support the continued expansion of VITRO's data center portfolio. In other words, PLDT wants to raise money from assets it already owns, such as its data centers, while still keeping control of a business it sees as central to its future.

VITRO REIT would be the Philippines' first digital infrastructure REIT, and the first local REIT whose initial portfolio consists of data center assets rather than the more familiar offices, malls, hotels, warehouses, or township properties. Ayala Land's AREIT began with office buildings. DoubleDragon's DDMP REIT was backed by office assets in the Manila Bay area. Megaworld, Robinsons Land, Filinvest Land, Citicore, Vista Land, and MREIT also brought their own property portfolios to the market.

The proposed offer involves the sale of up to 1.913 billion secondary common shares of VITRO REIT, with an over-allotment option of up to 286.96 million additional secondary shares. The offer price is up to P11 per share. If everything goes to plan and the over-allotment option is fully exercised, the offer could raise up to P24.2 billion in gross proceeds.

That would represent about 48.95% of VITRO REIT's issued and outstanding capital stock after the IPO. Put another way, even with the over-allotment option fully exercised, ePLDT would still retain a majority stake of about 51.05%. That is the balancing act behind the deal. PLDT can raise capital from VITRO's data center assets, give public investors a way to participate in the sector, and still keep control of the platform.

VITRO REIT's assets would be data centers, which are large, high-capacity facilities designed to support massive computing workloads, such as those needed for cloud services and artificial intelligence. This allows businesses to store and process vast amounts of data quickly and efficiently. The data center industry is growing rapidly, driven by increasing demand for cloud computing, big data analytics, and artificial intelligence.

The company says it has 11 data center facilities nationwide and more than 400 customers. Its sites serve enterprise, hyperscale, cloud, and other clients that need secure and reliable digital infrastructure. The most prominent facility is VITRO Sta. Rosa in Laguna, which they position as 'the Philippines' first AI-ready hyperscale data center.' It has 36 megawatts of IT load capacity.

VITRO REIT would be a new investment option for Filipinos, allowing them to participate in the growing digital infrastructure sector. This could help to drive growth and investment in the Philippines' data center industry, which is expected to continue growing in the coming years.

The SEC has yet to approve the proposed IPO, and the listing on the Philippine Stock Exchange is still pending. But if approved, the listing would mark a historic first for the local stock market. VITRO REIT would be the Philippines' first digital infrastructure REIT, and the first local REIT whose initial portfolio consists of data center assets rather than the more familiar offices, malls, hotels, warehouses, or township properties.

The proposed VITRO REIT could raise up to P24.2 billion in gross proceeds, representing about 48.95% of VITRO REIT's issued and outstanding capital stock after the IPO. Even with the over-allotment option fully exercised, ePLDT would still retain a majority stake of about 51.05%.