PLDT mulls over REIT route for data center arm
MANILA, Philippines — PLDT Inc. is contemplating over launching a real estate investment trust (REIT) offering, backed by its $1-billion data center business whose current property portfolio covers 10 facilities, to raise funds.
But while the REIT route would provide the company stronger control over ePLDT, it was not putting in the back burner plans of selling a stake in the unit just yet, according to Manuel Pangilinan, president and chair of the telecommunications giant.
“We have more flexibility in REIT because we can retain control of the operations of the data centers and we have majority of the equity interest in the data centers,” Pangilinan said in a briefing in Makati on Thursday.
A REIT is an entity that owns income-generating real estate. Investors betting on REITs earn through regular dividend payouts.
While an alternative plan is brewing, Victor Genuino, ePLDT president and CEO, said they were also in talks with several prospective investors as the business has drawn “a lot of interest.” No further details were disclosed.
REIT or selling stake
Reuters recently reported that PLDT was discussing with Japanese telecommunication company Nippon Telegraph and Telephone Corp. for a 49-percent stake in ePLDT.
READ: PLDT expands data center capacity on PH’s sustained digitalization
Pangilinan said they hoped to finalize by next month whether to pursue a REIT offering or to sell a stake.
The PLDT unit currently has 10 data centers with a total capacity of 50 megawatts.
By July, the company is set to open its 11th data hub in Laguna. Three more data centers are undergoing the design phase.
Data centers are facilities housing critical servers and networks. Demand for these hubs is on the rise due to the growing needs of hyperscalers, or entities providing cloud, networking, and internet services such as Amazon AWS, Microsoft Azure, Google GCP, Alibaba AliCloud, IBM, and Oracle.
In the first quarter, PLDT Inc. saw its net income grow by 9 percent to P9.82 billion as gross service revenues climbed 5 percent to P52.2 billion.
Data and broadband revenues
The bulk or 83 percent of the top line was accounted for by data and broadband revenues, which improved by 5 percent to P40.5 billion.
READ: PLDT’s broadband revenues rev up by 9%
PLDT has 39.4 million active data subscribers who use on average 11.6 gigabytes (GB), which was higher than 10.6 GB last year. Its fiber subscribers totaled 3.2 million as of end-March.
The company is set to spend P75 billion to P78 billion this year for capital outlays for cell site upgrades, deployment of home broadband ports, and data center and submarine cable investments.
Moving forward, Pangilinan said they were expecting consolidated service revenues and earnings before interest, taxes, depreciation, and amortization to “grow in the mid-single digit range, driven by robust increases in data and broadband revenue streams.”
