Analysts see deal execution, market timing behind VITRO REIT listing delay
Analysts say VITRO REIT's delayed listing reflects deal execution and market timing rather than a change in PLDT's commitment. The data centre REIT now targets a 12 Oct listing on the Philippine Stock Exchange, with PLDT aiming to raise up to US$400 million from the offering.
Deal execution and market conditions are shaping the timing of VITRO REIT, Inc.'s planned listing, stock market analysts said, rather than any change in parent company PLDT Inc.'s commitment to the transaction.
"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.
PLDT is seeking to raise as much as US$400 million (P24.6 billion) through the real estate investment trust (REIT) listing of its data centre assets, aiming to unlock value from its digital infrastructure portfolio and strengthen its balance sheet. VITRO REIT is a unit of VITRO Inc., wholly owned by ePLDT Inc., the information and communications technology subsidiary of listed telecommunications company PLDT.
Philippine Stock Exchange, Inc. (PSE) President and Chief Executive Officer Ramon S. Monzon said the REIT had postponed its listing date because it was in the process of closing deals with a few cornerstone investors. According to VITRO REIT's prospectus, the tentative date for its listing and the start of trading on the PSE is 12 Oct. PLDT had earlier targeted 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 centre REIT in the country, so naturally there is more effort to market the offering and ensure better price discovery," Mr Colet said.
Mr Arce noted that 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, giving investors exposure to a Philippine data centre REIT. "I think investor appetite is likely an important part of the timing decision. REIT IPOs are particularly sensitive to interest rates, bond yields, and the yield investors demand relative to alternative income investments," he said.
The proposed REIT will be backed by eight data centre 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.
