The real estate investment trust (REIT) business in the country continues to grow as existing companies get more assets and more REITs are listing their shares in the stock market.
Over the weekend, Megaword-affiliate MREIT Inc. announced the expansion of its portfolio as mother company Megaworld infuses additional office spaces in it.
Villar-affiliated VistaREIT INC. (VREIT) expressed optimism about the prospects of a reinvigorated economy due to the easing of restrictions.
MREIT said it will be acquire four more grade A office properties in Philippine Economic Zone Authority -accredited zones worth P5.3 billion from Megaworld, bringing its portfolio to P65 billion.
“This only makes up the initial tranche of the company’s P20-billion property for shares acquisition plan for 2022,” the company said.
The new infusion totals 44,567 square meters (sq.m.) in gross leasable area (GLA) and will increase the company’s asset portfolio by 16 percent to 325,000 sq.m. from the current 280,000 sq.m.
“The property infusions include Festive Walk 1B and Two Global Center in Iloilo Business Park, and One West Campus and Five West Campus in McKinley West, Taguig City,” MREIT said in a statement.
With the acquisitions, MREIT will have 100 percent ownership of the two Iloilo Business Park properties, and 80 percent economic interest in the two McKinley West office towers.
At present, the four prime office properties have an average occupancy rate of 96 percent, higher than the industry level of between 81 percent to 84 percent.
MREIT said the transaction is valued at capitalization rates of 6 percent and 5.4 percent for the Iloilo Business Park and McKinley West properties l, respectively, based on the ratio of the properties’ one-year income vis-a-vis that of its market value.
MREIT said both rates are above the prevailing forward yield of the company.
“On a blended basis, the resulting cap rate is 5.7 percent,” it said.
The properties will be exchanged for 263.7 million MREIT primary common shares at a valuation of P20 per share, a 1.4 percent premium over the volume weighted average closing price of the company for 40 trading days until March 30, 2022. It closed on Friday at P18.40 per share.
“Once the new acquisitions are completed, MREIT’s portfolio will cover 18 office properties in four Megaworld premier townships.
VREIT meanwhile said it is working on a strong portfolio of Villar-owned community-based malls as it pushes for its P 9.18-billion initial public offering (IPO) this year.
The company in late March announced it was looking to offer up to 3.33 billion secondary common shares at an offer price of up to P2.50 per share, with an greenshoe option of up to 333.75 million secondary common shares.
Selling shareholders are Vista Land subsidiaries — Masterpiece Asia Properties Inc., Manuela Corp., Communities Pampanga Inc., Crown Asia Properties Inc., and Vista Residences Inc.
“VREIT sees as a robust foundation its synergy with Villar Group’s retail ecosystem,” it said.
The company said it accounts for 68 percent of total portfolio GLA in the Villar Group’s malls and office buildings and contributed 77 percent of rental income for Dec. 31, 2021.
“With an appraised P 35.95 billion portfolio valuation, VREIT banks on a strong portfolio of 10 community malls and two PEZA-accredited office buildings. This makes it the first REIT in the country that offer majority community malls,” it said.
VREIT has 256,404 sq.m. of aggregate GLA–with 97 percent total occupancy rate at present and 5.09 years of weighted average lease expiry (WALE).
The initial VistaREIT assets cover SOMO, A Vista Mall; Starmall San Jose del Monte; Vista Mall General Trias; Vista Mall Tanza; Vista Mall Imus; Vista Mall Las Piñas; Vista Mall Las Piñas Annex; Vista Mall Pampanga; Vista Mall Antipolo; Vista Mall Talisay Cebu; Vistahub BGC; and Vistahub Molino.
