ALI hopes other firms will offer REITS

Ayala land Inc. (ALI) said it that the initial public offering (IPO) of its real estate investment trust (REIT) will encourage other Philippine companies to follow suit.

“AREIT Inc. IPO is not only for Ayala land, but also for the continued development of the Philippine capital markets. Since the REIT law was passed in 2009, domestic and foreign investors have been eagerly awaiting to invest in REITS in the Philippines,” AREIT Chairman Jose Emmanuel H. Jalandoni said.

“We hope our efforts to become the first company to offer this product will pave the way for more REIT listings in the future. REITS will enable capital recycling to further promote developments in the country.”

Already, the group of businessman Edgar Sia II is preparing to of fer its own REIT, which will be sponsored by Double Dragon Properties Corp. It expects to raise some P17 billion from the offer.

AREIT’S portfolio, meanwhile, consists of three properties in Makati City, namely Solaris One, Ayala North Exchange and Mckinley Exchange. These properties cover a total gross leasable area of 152,755.80 square meters and have a total occupancy rate of 99.9 percent. Ayala North Exchange—the largest property under Areit’s portfolio with a GLA of 95,000.35 square meter—is seen to boost revenues through its mixed offering of office towers, a support retail amenity, and serviced apartments branded as Seda Residences

Makati. Its prime location along Ayala Avenue is attractive to both tenants and investors. Net proceeds from the primary offer will be used to fund its acquisition of either Teleperformance Cebu from ALO Prime Realty Corp., a wholly-owned subsidiary of Ayala land, or an alternative property from ALI, or any of its subsidiaries or affiliates that financially and strategically meets or exceeds Teleperformance Cebu and AREIT’S financial and strategic investment criteria. Teleperformance Cebu consists of two BPO offices with a combined gross leaseable area (GLA) of 17,947.96 square meters.

The acquisition of Teleperformance Cebu will increase AREIT’S GLA by 11 percent to a total of 170,703.76 square meters.