AREIT, Ayala Land plan P22.48B share swap deal
MANILA— Ayala Land Inc. is set to conduct a property-for-share swap that will transfer flagship offices and malls to its real estate investment trust, in a transaction valued at P22.48 billion.
In a statement on Wednesday, AREIT Inc. said its parent will acquire 607.56 million of its primary common shares.
In exchange for the additional shares, Ayala Land will infuse assets to AREIT that have a combined gross leasable area of 190,000 square meters, a total occupancy rate of 99% and a weighted average lease expiry of 14.5 years.
The properties that will be added to AREIT’s portfolio are located in Makati City’s central business district, such as One Ayala Avenue East and West BPO Towers, as well as the Glorietta 1 and 2 mall wing and BPO buildings at Ayala Center.
The transaction will also cover MarQuee mall in Pampanga.
AREIT said their assets under management will hit P87 billion once the swap is completed.
“As we did in the last two years, we are committed to continually grow and diversify our assets to increase shareholder value for AREIT while ALI maximizes capital recycling and reinvests further in Philippine real estate,” said AREIT president and chief executive officer Carol Mills.
As it is, REIT has a record of being a successful investment vehicle in countries like Singapore. As a publicly-owned listed company, a REIT company is tasked to use proceeds from share sale to purchase and manage income-generating property assets such as malls, offices and warehouses.
At least 90% of income from these ventures are required to be declared as dividends with shareholders.
AREIT noted that the company started with 153,000 sqm in its portfolio. Ayala Land’s REIT firm noted it has delivered 52% in total shareholder return.