July 10, 2020 at 10:15 pm
Jenniffer B. Austria
The Securities and Exchange Commission approved the P15.1-billion maiden share offering of Ayala Land Inc.’s real estate investment trust unit.
Ayala Land’s AREIT became the first company to file for REIT offering, after the government early this year sweetened the rules on REITs, which manage real estate assets that regularly generate profits and distribute dividends to investors.
The SEC approved AREIT’s planned offering of up to 502.57 million shares at a price of up to P30.05 per share.
Documents showed 47.864 million of the total offered shares consisted of primary shares, 430,775 million in secondary shares and 23,932 million in over-allotment shares.
AREIT will run the public offering from July 27 to 31 and debut on the Philippine Stock Exchange on Aug. 7, based on the latest timetable it submitted to the SEC.
AREIT will use the net proceeds from the sale of primary shares amounting to P1.33 billion for the expansion of its building portfolio through the acquisition of a fourth building—Teleperformance Cebu.
Ayala Land could net about P13.309 billion from the secondary offer once it fully exercised the overallotment option.
AREIT’s property portfolio consists of three commercial buildings, excluding the land on which they stand. These include Solaris One and Ayala North Exchange and, as of Feb. 1, 2020, McKinley Exchange via lease from the sponsor.
BPI Capital Corp. will serve as the sole global coordinator for the maiden share sale while BPI Capital, UBS AG Singapore Branch, PNB Capital and Investment Corp. and SB Capital Investment Corp. will act as the joint underwriters for the offering.
Assuming that the over-allotment option was exercised, AREIT would have a public float of 49 percent upon listing. Ayala Land said it would retain a 41.61-percent shareholding in AREIT, while subsidiary AyalaLand Offices Inc. will own the remaining 9.39 percent upon completion of the public offering.
Shareholders are entitled to receive as dividends at least 90 percent of the annual distributable income of the stock corporation established principally for the purpose of owning income-generating real estate assets.
Meanwhile, DD Meridian Park REIT, the real estate investment trust unit of DoubleDragon Properties Inc. said it was planning to raise as much as P16.9 billion through an initial public offering in October.
DoubleDragon said in a disclosure to the stock exchange DDMP REIT would consist of seven buildings with a total area of 248,349 square meters valued at P50.889 billion.
“The REIT valuation of US$1 billion we believe is an attractive size that would appeal to a strong pool of both foreign and local REIT investors,” said DoubleDragon chief investment officer Hannah Yulo-Luccini.
“REITs are a good way to recycle capital for expansion of the company’s portfolio and raise equity to further boost its balance sheet. Since the offer will only cover 33.33 percent of the REIT basket, DoubleDragon will retain majority of the REIT assets so it will remain consolidated in the company’s balance sheet,” she said.
DoubleDragon said the proceeds from the listing would be reinvested in the Philippines as required under the amended REIT rules.
Under the plan, DDMP REIT will use the IPO proceeds to construct about 450,000 sqm of building floor area which will further significantly increase the leasable portfolio and recurring rental revenues of the company in the near term.