Property developer Megaworld Corp. is seeking to raise up to P27.3 billion from the planned initial public offering of its office assets that could become the biggest real estate investment trust in the country.
Megaworld said in a disclosure to the stock exchange it filed with the Securities and Exchange Commission an application to sell up to 1.239 billion secondary shares in MREIT Inc. at a maximum price of P22 apiece.
The shares would represent up to 49 percent of the total issued and outstanding shares of MREIT, assuming the full exercise of the over-allotment option.
Megaworld plans to inject 10 office, retail and hotel assets with an aggregate gross leasable area of 224,430.80 square meters. The assets are located in three prime townships in Taguig City, Iloilo City and Quezon City.
The MREIT portfolio of assets include 1800 Eastwood Avenue, 1880 Eastwood Avenue, E-Commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley, One Techno Place, Richmonde Tower and Richmonde Hotel Iloilo.
These buildings are more than 95-percent occupied mostly by business process outsourcing companies and other multinational tenants.
“Our REIT includes properties in three of our most sought-after premier township developments of Eastwood City, McKinley Hill and Iloilo Business Park, which are home to around 200,000 BPO and other office workers today,” MREIT president and chief executive Kevin Andrew Tan said.
“Our ‘tried-and-tested’ signature concept of the township has attracted over 200 BPO and multinational companies to locate with us through the years since we started our first-ever Eastwood cyberpark in 1999,” Tan said.
The company tapped BDO Capital & Investment Corp., Credit Suisse (Singapore) Ltd., UBS AG Singapore Branch and DBS Bank Ltd. as joint global coordinators for the IPO and BDO Capital as domestic lead underwriter.
Megaworld has 1.4 million sq. m. of office leasing space across 10 township projects. Megaworld will be the fifth property firm to conduct an REIT offering.
AREIT Inc. of Ayala Land and DDMP REIT Inc. of DoubleDragon Properties Corp. are listed on the stock exchange while Filinvest REIT of Filinvest Land Inc. and RL Commercial REIT of Robinsons Land Corp. have pending IPO applications with the SEC.
REITs are companies that own and operate income-generating real estate assets, such as offices, apartment buildings, hotels, shopping centers, warehouses, hospitals, retirement homes, student housing, airports, seaports, highways and transmission towers.
Their income stream can come from lease rentals or other forms of recurring income of the property portfolio of the REIT. By buying shares in a REIT, investors can tap into different areas of the market and potentially earn dividends without buying or managing the property on their own.
