PLDT unit files for P24-B data center REIT IPO

VITRO, Inc., the data center arm of PLDT Inc., has filed for what could become the country’s first digital infrastructure real estate investment trust (REIT), seeking to raise up to P24.2 billion through an initial public offering (IPO).

In a disclosure on Monday, PLDT said VITRO had submitted a registration statement and REIT plan to the Securities and Exchange Commission (SEC), as well as an application for listing on the Main Board of the Philippine Stock Exchange (PSE).

As part of the transaction, VITRO is also seeking SEC approval to change its corporate name to VITRO REIT, Inc. VITRO is a unit of ePLDT, Inc., PLDT’s information and communications technology holding company.

Subject to regulatory approvals, market conditions, and other applicable approvals, ePLDT plans to offer up to 1.91 billion secondary common shares, with an over-allotment option of up to 286.96 million secondary common shares, at an offer price of up to P11 apiece.

The proposed offer is expected to raise gross proceeds of up to P24.2 billion, assuming the full exercise of the over-allotment option.

The shares to be sold represent about 48.95% of VITRO REIT’s outstanding capital stock after the completion of the offer and will be offered by ePLDT as the sponsor. Under REIT rules, listed REITs are required to distribute at least 90% of their distributable income as dividends.

The proposed REIT will be backed by eight data center assets with a combined capacity of 27 megawatts (MW).

Proceeds from the offer will be used by ePLDT to reduce debt while complying with REIT regulations and its approved reinvestment plan.

VITRO has appointed UBS AG, Singapore Branch and BPI Capital Corp. as lead international underwriter and domestic lead underwriter, respectively. The two institutions will also serve as joint global coordinators and joint bookrunners for the proposed offer.

“Today’s filing marks an important step in our efforts to unlock value from PLDT Group’s digital infrastructure portfolio while supporting the continued expansion of VITRO REIT’s data center platform,” ePLDT and VITRO REIT President and Chief Executive Officer Victor S. Genuino said.

He said the proposed IPO would create an opportunity for investors to participate in the growing digital infrastructure sector.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the planned REIT listing could help revive the domestic IPO market.

“VITRO REIT is effectively positioned as a yield-driven play which is likely to resonate with a broad investor base,” he said in a phone message to BusinessWorld.

“As the country’s first data center REIT, it also offers equity exposure to structural growth themes, particularly the expansion of the digital economy and rising demand for artificial intelligence,” he added.

In January, the SEC issued revised REIT rules that expanded the framework for income-generating assets and allowed unlisted special purpose vehicles and incorporated joint ventures.

Under the revised rules, REITs may directly or indirectly own income-generating real estate through unlisted special purpose vehicles, provided they hold at least two-thirds of the voting shares.

Shares in PLDT rose by P49, or 4.46%, to close at P1,148 apiece on Monday.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera