MANILA – AREIT, Inc. (AREIT), the first real estate investment trust (REIT) in the country, has identified 10 properties included in its PHP15 billion property-for-share swap transaction with its sponsor, Ayala Land, Inc. (ALI).
In a disclosure to the Philippine Stock Exchange (PSE) Thursday, AREIT announced a total of 205,000 square meters of leasable space, primarily composed of office leasing properties located within ALI’s prime estates in the country, will form part of its roster of REIT assets.
These are Vertis North commercial development which has three office buildings and a retail podium located in Quezon City; One and Two Evotech in Nuvali Santa Rosa, Laguna; Bacolod Capitol Corporate Center and Ayala Northpoint Technohub, both located in Negros Occidental; and office condominium units at BPI-Philam Life buildings in Makati CBD and Madrigal Business Park in Alabang.
The largest of these properties is Vertis North commercial development with 125,000 sq. meters of leasable space and a retail podium of 39,000 sq. meters. The three office buildings are 97 percent occupied and are leased to large business process outsourcing (BPO) locators including Google Services Philippines, Teleperformance, Telus and Global Payments.
The retail component is operated by a wholly-owned subsidiary of ALI under the Ayala Malls brand and will pay a monthly guaranteed building lease to AREIT for a period of 36 years, ensuring stable income to AREIT. Vertis North commercial development is LEED certified.
Following Vertis North commercial development are the Evotech buildings in Nuvali with a total of 23,000 sq. meters of leasable space. The buildings are 100 percent occupied and leased to Concentrix CVG Philippines and IBM Business Services. One Evotech is LEED silver certified.
The other properties are Bacolod Capitol Corporate Center with 11,000 sq. meters and Ayala Northpoint Technohub with 5,000 sq. meters both of which are 100 percent occupied by ARB Call Facilities and Iqor, respectively. All said buildings are PEZA accredited.
Furthermore, the office condominium units in the BPI-Philam Life Buildings in Makati and in Alabang have a total of 1,500 sq. meters, 100 percent occupied and leased to Oberthur Card Systems in Makati and Amaia Land, an Ayala Land subsidiary headquartered in Alabang.
The property-for-share swap transaction with ALI is subject to the approval of its shareholders on their first annual meeting this April 23, as well as pertinent regulatory bodies.
Last March 23, AREIT announced its board of directors approved the increase of the company’s authorized capital stock from PHP11.74 billion to PHP29.5 billion and the subscription of ALI of 483,254,375 primary common shares of AREIT, in exchange for the identified ALI commercial properties valued at PHP15.464 billion to be undertaken at a price of PHP32 per share as validated by a third-party fairness opinion.
If the transaction is approved, AREIT’s outstanding common shares will increase to 1,508,910,810 from 1,025,656,435 wherein ALI will own about 66 percent of the total shares demonstrating its strong support as the sponsor of AREIT while adhering to the prescribed minimum public ownership requirements under Philippine laws.
AREIT’s deposited property value will increase from PHP37 billion to PHP52 billion and its leasing portfolio will expand further from 344,000 to 549,000 sq. meters. The properties are expected to contribute further to its operating cash flows, boosting dividends per share.
“This transaction demonstrates the priority of a well-designed REIT which is to generate compelling yields for its shareholders. At the same time, it allows AREIT to grow its assets significantly and increase shareholder value” AREIT president and chief executive officer Carol Mills said. (PNA)