SM Investments to exit data center business

MANILA, Philippines — Conglomerate SM Investments Corp. of the Sy family is planning to exit the data center business, citing high power cost in the country as a major concern.

“Right now, we are not really focused on data centers because from our perspective, the power cost is very expensive and the small minority we have in the data center business we’ll probably sell that eventually,” SM Investments president and chief executive officer Frederic DyBuncio said.

YCO Global Cloud Centers Holdings Inc. is currently part of the portfolio investments of SM Investments.

YCO is a digital infrastructure company developing sustainably built, carrier-neutral and greenfield data centers.

In April last year, SM Investments subscribed to 5.98 million shares of the company, increasing its equity interest in YCO to 18.1 percent.

SM Investments previously said that it is exploring the data center space to capitalize on the growing demand for data storage, especially with the rising use of artificial intelligence.

DyBuncio, in an interview last March, however, said that while the company is still looking at opportunities in putting up data centers, any potential investment in the space has been deferred for the meantime.

He said that major hyperscalers still prefer to go to countries like Malaysia and Vietnam because they feel that the Philippines has too much natural calamities and the cost of power is very expensive.

The company was also previously in talks with a local partner to build “cold shells” or buildings that will house servers in an industrial park in Batangas.

DyBuncio earlier said the construction of the project has not yet started, but it will “most likely” commence in 2026.

Asked if the company will still pursue the project by next year, he said “not anymore.”

SM Investments is one of the largest conglomerates in the country with investments in market-leading businesses in retail, banking and property.

It also invests in ventures that capture high growth opportunities in the emerging Philippine economy.