SEC greenlights Ayala Land bid to pioneer REITS in PHL
The Securities and exchange Commission (SEC) has approved the initial public offering of the real-estate investment trust (REIT) of Ayala Land Inc., the first company to do so after the REIT Act was passed a decade ago.
in its July 9 meeting, the SEC en banc approved the registration statement of AREIT inc., formerly known as one Dela Rosa Property Development inc., for 1.09 billion common shares to be listed on the main board of the Philippine stock Exchange under the trading symbol “AREIT.”
The registration statement covers up to 47.86 million new common shares and up to 409.01 million existing common shares for public offering, with an overallotment option of up to 45.68 million secondary shares, at a maximum offer price of P30.05 apiece.
AREIT may run the public offering from July 27 to 31 and will debut on the PSE on August 7, based on the latest timetable.
The company could raise P1.3 billion in net proceeds from the primary offer, and P13.3 billion from the secondary offering. Proceeds of which will be used for the expansion of its building portfolio through the acquisition of a fourth building, Teleperformance Cebu, excluding the land, from a subsidiary of the sponsor or an alternative property from the sponsor or any of its subsidiaries or affiliates.
As required under the revised implementing rules and regulations of Republic Act 9856, or the REIT Act of 2009, the sponsor shall reinvest the net proceeds in real estate and infrastructure projects in the Philippines within a year.
BPI Capital Corp. was picked as the sole global coordinator for the share sale. it is also the joint bookrunner, together with UBS Ag singapore Branch, PNB Capital and investment Corp. and sb Capital investment Corp.
Assuming full exercise of the over-allotment option, the public offering would allow the public to own 49 percent of the issued and outstanding common shares of AREIT.
Ayalaland will retain a 41.61-percent shareholding in AREIT, while its subsidiary Ayala land offices inc. will own the remaining 9.39 percent upon completion of the public offering.
AREIT’S property portfolio consists of three commercial buildings, excluding the land. These are solaris one and Ayala north Exchange and, as of February 1, Mckinley Exchange via lease from the sponsor.
Ayala land President and CEO Bernard Vincent o. Dy said each subsector in the Philippine property sector is bound to see different stages of recovery from the economic fallout caused by the Covid-19 pandemic. Dy noted that Ayala land’s office and warehouse logistics units continue to operate without significant effects, while others are seeing different results.
Ayala land said it is seeing “encouraging signs” in its residential business, which recorded increasing sales while the enhanced community quarantine was in effect.
“We’re seeing a pick-up in activity in residential sales as early as now. We hope that positive trend will continue,” Dy said.
The company’s mall business has been affected due to the implementation of quarantine measures since March, prompting consumers to stay at home.
The lockdown measures have also heavily affected the company’s hotel and resorts segment, which Dy said will recover only when people are allowed to travel.
Amid these impacts, Dy said that the property industry is still one of the best investment options.
He cited the growth of property prices in Ayala Alabang, which started at P230 per square meter in 1978 and has since grown to about P100,000 to P110,000 per square meter today, showing a compounded annual growth rate of 16 percent to 17 percent.
“if you look at long-term trends of property, taking into account various economic cycles, i believe property continues to be one of the best, if not the best, performing asset class.”