PLDT is set to join Asia’s data center real estate investment trust (REIT) wave with plans for a listing that could be worth as much as $400 million. The board of the Philippines’ telco on Tuesday approved a proposal to float its data center arm Vitro via a REIT.
Chairman and CEO Manny Pangilinan said the company aimed to raise between $300 million and $400 million, with the proceeds to be used to pay down debt. He told a shareholder meeting PLDT believed it was “not getting the kind of values we think we ought to get for the data centers.”
The operator had explored selling a minority stake in Vitro to outside investors, including the NTT Group – which owns around 20% of PLDT – but they had insisted on taking a controlling stake.
It is now taking advantage of recently amended listing rules that allow digital infrastructure assets such as data centers to be included in REITs. PLDT said the Vitro REIT is intended to unlock value from its digital infrastructure assets and create a long-term capital recycling vehicle that could support Vitro’s growth.
Biggest IPO in years
Vitro manages 11 data centers across the Philippines, with the biggest having 50MW in design capacity. The REIT would initially include just eight of these, with total capacity of 27MW, but may add more depending on demand, the telco said. If approved, this would be the Philippines’ first data center REIT.
The concept has been running quite strongly in Singapore, where three pure-play data center REITs have launched in the past 18 months, two of which are telco-linked. The latest is the NTT DC REIT, backed by the Japanese telco, which listed six data centers in the US, Austria and Singapore last July.
The IPO raised $773 million – the biggest listing on the Singapore exchange in six years. The other two pure-play data center REITs are Keppel DC, whose parent owns mobile operator M1, and Digital Core.
The other REIT in the region is Australia’s Digi Infraco REIT, which listed in late 2024, with 4.3 billion Australian dollars (US$3.0 billion) in assets in Australia and the US.
Despite the enthusiasm for the REITs, and the healthy growth in data center revenue, their trading performance has so far been modest. The NTT DC REIT is down 6% since listing and Digi Infraco has dropped 11% this year.
Singapore analysts say the data center REITs last year performed broadly in line with the wider REIT sector. But valuations are also impacted by higher interest rates and are heavily influenced by the yield spread relative to bonds and fixed-income assets, the analysts said.