Telecommunications firm PLDT Inc. has decided not to pursue the potential sale of a minority stake in its data center business, opting instead to list the portfolio as a real estate investment trust (REIT) to help reduce its debt burden.

PLDT chief financial officer Danny Yu said the company is now “seriously considering” a REIT for its data center arm, VITRO Inc., after failing to find an investor willing to be a minority partner.

Yu said prospective investors are not keen on taking only a minority stake in the business, which remains non-negotiable for PLDT as it seeks to raise fresh capital.

“Most of them don't want minority, they want majority. So our only choice right now is really REIT,” he said in a press briefing on Thursday, Feb. 26.

While he noted that this stance could change if a good offer comes in, Yu said putting up a REIT for VITRO is the most ideal option to maximize the potential of its data centers.

VITRO is well ahead of competitors in the domestic data center scene, with an industry-high capacity of 100 megawatts (MW) across 11 data centers.

Last year, VITRO and its parent firm, ePLDT, generated ₱6.5 billion in revenues, up 22 percent from the previous year. For its colocation services, VITRO reported 17 percent revenue growth.

PLDT sees VITRO as an attractive asset, especially with the growing adoption of artificial intelligence (AI), which increases demand for data centers where technology companies can store critical data.

With this, the subsidiary becomes even more enticing for investors seeking to tap into its growth potential, which in turn could provide PLDT with funds to ease its debt.

Based on its financial report, PLDT’s debt has reached ₱284.7 billion by the end of last year, which is 2.56 times its earnings before interest, taxes, depreciation and amortization (EBITDA).

For the year, PLDT is aiming to reduce the debt-to-EBIDTA ratio to just two times.

PLDT chairman and chief executive officer (CEO) Manuel V. Pangilinan estimated last year that the company’s data center business is valued at around $1 billion, or around ₱57.61 billion.

Victor Genuino, president and CEO of VITRO, said they have been seriously considering a REIT listing after the Securities and Exchange Commission (SEC) expanded the framework on what assets can qualify for a REIT listing.

In its first memorandum circular for the year, the SEC amended its REIT policy to expand income-generating assets by including energy and telecommunications facilities, which cover data centers.

Of the 11 data centers under its portfolio, Genuino said the new policy allows only those that have been operational for more than three years to qualify for a REIT listing. This would exclude VITRO’s largest asset, the 50-MW data center in Santa Rosa, Laguna.

To further reduce debt, Yu said the company remains open to selling more of its idle assets throughout the year, having recently sold one property in Cebu and another in Baguio.

He said they are actively monitoring current real estate market conditions to ensure that such assets are not sold below target prices.