AREIT signs P1.45-b deal to acquire Cebu office building

AREIT Inc., a real estate trust company owned by Ayala Land Inc., said Wednesday it signed an agreement to acquire an office building in Cebu province for P1.45 billion.

AREIT said in a disclosure to the stock exchange Wednesday it signed a deed of sale with ALO Prime Realty Corp. to buy Teleperformance Cebu, which has gross leasable area of 18,092 square meters.

“The acquisition in Cebu is strategic for AREIT. Most BPOs in Metro Manila have expansion sites and operations in Cebu because of its strong talent pool. Like in Metro Manila, Ayala Land has a significant share in the Cebu office market,” said AREIT president Carol Mills.

The company said the acquisition would increase its dividend yield consistent with its growth strategy of acquiring prime real estate assets with stable occupancy.

AREIT is scheduled to pay quarterly dividends starting September 2020 and is required to pay out at least 90 percent of its income under the REIT Act of 2009.

Completed in 2013, Teleperformance Cebu is a Grade-A office building accredited by Philippine Economic Zone Authority and LEED Gold Certified Business Process Outsourcing development in Cebu I.T. Park.

The 12-story building is 100-percent occupied with 17,682sqm leased by Teleperformance and 410 sqm by a fast-food chain.

AREIT will make an initial payment of P290 million after the signing of the deed of absolute sale while the balance of P1.16 billion would be paid upon the complete transfer of the PEZA registration to AREIT.

AREIT said it would use the net proceeds from the recent initial public offering to purchase the property.

The acquisition is expected to boost the company’s portfolio to 172,000 sqm of GLA from 153,000 sqm.

The REIT firm has a portfolio of three Grade-A properties in Makati City including Ayala North Exchange, Solaris One and McKinley Exchange. 

After its maiden share offering, AREIT plans to establish a three-year bond shelf registration program of up to P15 billion.

AREIT said the planned bond offering would provide the company the ability to leverage for future acquisitions while preserving cash for dividend distributions.

The share price of AREIT rose 0.19 percent to close at P25.70 on Wednesday.

Topics: AREIT Inc. , Ayala Land Inc. , Cebu office building
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