AyalaLand Logistics clarifies loan details for data center JV

AyalaLand Logistics [ALLHC 1.92, down 1.0%; 53% avgVol] [link] clarified that A-Flow Properties (AFLOW), a joint venture between ALLHC and FLOW Digital for the development of data centers, has signed a 10-year P2.4 billion loan agreement with Landbank which is actually just the first tranche of a P10.8 billion credit facility. ALLHC said that the first tranche of the loan will cover the development of the first phase of AFLOW’s 6MW data center campus, which ALLHC said is “envisioned” to be a three-building facility with a 36MW capacity “at full completion”. Any additional tranches will be covered by separate loan agreements. ALLHC said that the complete funding for AFLOW’s development will be “through a combination of internal and external sources.”

MB BOTTOM-LINE: On the one hand, data centers are proving to be an in-demand asset class that international investors find particularly attractive, so ALLHC’s push into this space is one that shareholders will probably look at favorably. On the other hand, though, this joint venture is just another example of ALLHC’s general lack of focus. ALLHC’s top-level purpose appears to be to monetize the Ayala Group’s considerable industrial land holdings, and the main strategy to that end–at least to date–has been through the outright sale of land. But it also develops and manages some industrial business areas. And warehouse distribution centers. And a little bit of cold storage. Oh, and it also sells electricity. And now it also does data centers, too. As an investor, I don’t care at all about the lumpy and uneven sale of bulk lots, but I am passionate and very interested in actual logistics (warehouses and cold storage) and data centers as separate investment opportunities. I’d love for the opportunity to invest in ALLHC’s actual logistics business separately from its land sales business. Same goes for the data center business. What I don’t want is this random grab bag of activity that is way less “logistics” and way more “stuff you can do with non-residential land”. 

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