By Ashley Erika O. Jose, Reporter
DEAL EXECUTION and market conditions may be shaping the timing of VITRO REIT, Inc.’s planned listing, stock market analysts said.
“VITRO REIT’s listing toward the end of the year appears more likely to reflect deal execution and market timing than a change in PLDT’s commitment to the transaction,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message to BusinessWorld on Monday.
PLDT Inc. is looking to raise as much as $400 million (P24.6 billion) through the planned real estate investment trust (REIT) listing of its data center assets as it seeks to unlock value from its digital infrastructure portfolio and strengthen its balance sheet.
VITRO REIT is a unit of VITRO Inc., which is wholly owned by ePLDT Inc., the information and communications technology subsidiary of listed telecommunications company PLDT.
“I know that VITRO REIT, the data center of PLDT, has postponed its listing date precisely because they are in the process of closing deals with a few cornerstone investors,” Philippine Stock Exchange, Inc. (PSE) President and Chief Executive Officer Ramon S. Monzon said in an interview with Bloomberg TV’s Haslinda Amin last week.
According to VITRO REIT’s prospectus, the tentative date for its listing and the start of trading on the PSE is Oct. 12.
PLDT had earlier said it was targeting a fourth-quarter listing, subject to market conditions, after conducting local and international roadshows for prospective cornerstone investors.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said moving the target listing to later this year would give the issuer and its underwriters more time for institutional book-building.
“It’s the first data center REIT in the country, so naturally there is more effort to market the offering and ensure better price discovery,” Mr. Colet said in a Viber message.
“PLDT itself has said it is still targeting a fourth-quarter listing but that the transaction remains subject to market conditions, while management has already conducted local and international cornerstone roadshows and described investor interest as positive,” Mr. Arce said.
He said the size and relatively new asset class of the offering could require more time for prospective cornerstone and institutional investors to assess the underlying assets.
VITRO REIT could raise as much as P24 billion based on the initial terms of the offering, while giving investors exposure to a Philippine data center REIT, Mr. Arce said.
“I think investor appetite is likely an important part of the timing decision. REIT IPOs (initial public offerings) are particularly sensitive to interest rates, bond yields, and the yield investors demand relative to alternative income investments. Even a fundamentally attractive asset can struggle if it comes to market at a yield that investors consider insufficient,” he said.
The proposed REIT will be backed by eight data center assets. The offering consists entirely of secondary shares to be sold by ePLDT, with the proceeds subject to reinvestment requirements under the Real Estate Investment Trust Act of 2009 and VITRO REIT’s approved reinvestment plan.
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.
