AREIT Inc., the pioneer real estate investment trust company in the Philippines, said Wednesday it obtained the Securities and Exchange Commission’s approval on its planned P11.25-billion property-for-share swap deal with parent Ayala Land Inc.
The deal will enable AREIT to acquire six Cebu-based office buildings from ALI, boosting its gross leasable area by 22.6 percent to 673,000 square meters from 549,000 sq. m.
The six buildings are eBloc Towers 1 to 4 located at Cebu IT Park, ACC Tower and Tech Tower at Ayala Center Cebu. The office buildings have GLA of 124,299 sq. m., with an overall occupancy rate of 97 percent, leased by major business process outsourcing firms.
AREIT said that in exchange for the six office buildings, ALI would subscribe to 52.136 million AREIT shares. This will increase ALI’s stake in AREIT to 66 percent from 60.32 percent.
The new assets are expected to contribute to earnings of the company in the succeeding periods, it said.
“As the first Philippine REIT which successfully listed amidst the pandemic, AREIT aspires to further grow its leasing portfolio with prime and stable assets,” AREIT said in a disclosure to the stock exchange.
AREIT said the share swap would be accretive and potentially increase the overall yield to 5 percent once the new assets are infused, from 4 percent in 2022.
AREIT said that after receiving the SEC approval, it would apply for the Bureau of Internal Revenue certificate authorizing registration for the new assets and the listing of the shares in favor of ALI within the first quarter.
AREIT earlier reported plans to grow its asset portfolio at an average of 100,000 sq. m. of GLA in 2023 and 2024 and achieve total shareholder return range of 10 percent to 12 percent.
The share price of AREIT fell 0.28 percent Wednesday to close at P35.60.