Telecom giant PLDT Inc. is no longer pushing through with the establishment of a real estate investment trust (REIT) for its $1 billion data center business as it is now in the advanced stages of selling a 49 percent stake to a strategic investor.

“We're talking to the final bidder at this stage. We've agreed on the valuation with them,” said PLDT Chairman, President and CEO Manuel V. Pangilinan during an interview at the sidelines of the firm’s annual stockholders’ meeting. 

He noted that, “There are a few issues and there are still a number of open points to be negotiated and agreed with them. But, hopefully in the next few weeks we should be able to finalize and convert those discussions into a binding term sheet. So hopefully by July we should have a binding term sheet with this particular investor.” 

Pangilinan described the offer price as "okay" adding they will keep 51 percent ownership of the data centers, "both the hyperscalers and the domestic data centers that we own and those that will be built.”

He added that, the deal will value the data center business as more than $1 billion.

Meanwhile, PLDT will no longer pursue the REIT registration of its data center business. “Not anymore. It's too complicated. It will probably take longer and the opportunity will be a bit more expensive,” Pangilinan said pointing out that they have opted for “plain and simple, equity.”

Earlier, Pangilinan said they were considering the sale or the real estate investment trust (REIT) listing of PLDT’s data center business which it values at more than $1 billion.

“The valuation we're getting is likely to be north of $1 billion. I think we're going to sell but nothing has been decided… the strategic question do we sell 49 percent, 40 percent, 61 percent, 60 percent of the data center?

“Obviously, if we sell control, the data center will get more money and more premium, right? That's just how it is. So the question to PLDT is do we keep control of what we regard to be a strategic asset for the group?

“Because one of the major pillars of (PLDT) Enterprise and ePLDT would be data centers,” he noted adding that, in the meantime, they continue to expand and accelerate the development of the data centers.

Pangilinan said that, “If we cannot get the values (we want) from equity investors, if we decide to keep control of our own destiny, we might go for a REIT in data centers. So don't be surprised if we go for that.”

This way, he said “PLDT will still get the value that's close enough to the value we want, which is north of a billion dollars. So we have more flexibility, certainly, because we can retain control of the operations of the data center and we have the majority of the equity interest in the data centers.”

ePLDT, the ICT subsidiary of the PLDT group, established VITRO Inc., the data center arm of the PLDT Group, to ensure a deliberate focus on digital infrastructure build and to further accelerate the growth of its data center business which ended the quarter strong with over 5,600 data center racks and an occupancy rate in excess of 70 percent.

The construction of VITRO Sta. Rosa (VSR), its largest and most advanced facility to date, remains on track to go live in July, activating an initial 10MW of IT power. With its aggressive data center builds, VITRO is poised to double its facility capacity to 99.5MW once VSR is fully operational.

Moreover, PLDT Global also spearheads the group's international sales and go-to- market programs for enterprise connectivity, messaging, and data center solutions. It targets and expands key industry segments such as Hyperscalers, Content Network Delivery Aggregators, Global Enterprises, Carriers, and Service Providers.