AREIT Inc., a trailblazer in the real estate investment trust sector, aims to expand its portfolio to $3 billion over the next three years, positioning itself to become a leading player in the region.
Jose Eduardo Quimpo II, who recently stepped into the role of president and CEO of AREIT, outlined the company’s strategy in a forum. The plan includes diversifying the company’s assets to encompass retail, hotel and industrial estates in addition to its current focus on office properties.
“We’re on track to close the year with $2 billion in assets under management [AUM],” Quimpo said. “Our goal is to reach the $3-billion milestone, which will align us more closely with our regional peers. We are committed to diversifying our asset mix with offices, malls, hotels and industrial properties to enhance returns and manage sector risks through various economic conditions.”
Offices make up two-thirds of AREIT’s assets, but the company expects retail assets to account for more than 10 percent of the portfolio by year-end.
Leadership transition
Quimpo’s appointment heralds a new phase for AREIT, as he takes on the challenge of guiding the company through a period of diversification and growth.
With a strong background in investment banking and capital markets, Quimpo is expected to drive AREIT towards achieving a market capitalization comparable to its regional counterparts.
His arrival follows Carol Mills’ successful tenure as president and CEO, during which she led significant portfolio expansion and increased the company’s AUM considerably. Mills will now concentrate on her role as president and CEO of Ayala Land Offices.
Strong performance
AREIT has delivered robust performance this year, reporting a net income of P2.9 billion in the first half, up 44 percent from the previous year. Revenues increased 43 percent to P4.2 billion, with an occupancy rate of 96 percent, surpassing the industry average.
The company’s growth has been fueled by strategic acquisitions, including One Ayala Avenue East and West Office Towers, Glorietta 1 and 2 Mall and the Seda Hotel in Lio, El Nido. AREIT’s portfolio includes offices, malls, hotels and industrial land, with an AUM of P88.6 billion.
“AREIT is on track to quadruple its AUM this year compared to our listing in 2020, a significant milestone as we mark our fourth anniversary,” said Mills.
Looking ahead, the company anticipates its AUM will reach P117 billion, contingent on regulatory approval of an asset-for-share swap with its sponsor, Ayala Land Inc. This transaction will include high-value assets such as the new Ayala Triangle Gardens Tower Two Office Building and other prime properties.
As AREIT forges ahead, its strategy will focus on leveraging its diversified asset base and strategic acquisitions to solidify its position as a prominent regional REIT.
