A shot in the arm for REIT

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    The real estate investment trust (REIT) sector got a shot in the arm with the approval of the prospective first REIT offering in the country while another company announced details of its own REIT plans.

    Over the weekend, the Securities and Exchange Commission announced it has given the thumbs up sign to Ayala Land Inc.’s prospective P15.1 -billion REIT offering while DoubleDragon Properties Corp. announced the first tranche of assets it plans to infuse into its own P17-billion REIT, eyed for the fourth quarter of the year.

    Ayala Land’s REITis the first to receive regulatory approval more than a decade since the investment scheme’s enabling law came into force in 2009.

    Ayala Land through unit AREIT Inc. will sell to the public 502.57 million common shares of AREIT at an offer price of P30.05 per share. The offer is divided into an initial 47.86 million primary shares and another 409.02 secondary shares for the firm offer, and another 45.69 million secondary shares covering the overallotment option.

    “AREIT may run the public offering from July 27 to 31 and debut on the Philippine Stock Exchange on August 7, based on the latest timetable submitted to the Commission,” the SEC said.

    “AREIT could raise P1.33 billion in net proceeds from the primary offer for the expansion of its building portfolio through the acquisition of a fourth building, Teleperformance Cebu, excluding the land, from a subsidiary of the sponsor or an alternative property from the sponsor or any of its subsidiaries or affiliates,” it added.

    The SEC said Ayala Land could net about P13.309 billion from the secondary offer, assuming full exercise of the overallotment option.

    “As required under the revised implementing rules and regulations (IRR) of Republic Act No. 9856 or the REIT Act of 2009, the sponsor shall reinvest the net proceeds in real estate and/or infrastructure projects in the Philippines within a year,” it said.

    BPI Capital Corp. will serve as sole global coordinator for the share sale, as joint bookrunner together with UBS AG Singapore Branch and joint lead underwriter along with PNB Capital and Investment Corp. and SB Capital Investment Corp.

    Post-initial public offer, the public will own 49 percent of the Ayala Land REIT, while Ayala Land will retain a 41.61 percent. Its subsidiary AyalaLand Offices Inc., meanwhile will own the remaining 9.39 percent.

    Meanwhile, Double Dragon said the intended DD Meridian Park REIT (DDMP REIT) will consist of 7 buildings with a total area of 248,349 square meters (sq.m.). The estimated value of the basket of REIT assets stands at P50,889,814,608.

    The company expects to generate P16.97 billion of proceeds from the planned REIT listing representing an offer of 33.33 percent of the selected REIT assets,” it said.

    DoubleDragon said all of the proceeds from the REIT IPO will be reinvested in the Philippines.

    “The REIT proceeds will be enough to construct about 450,000 sq.m. of building floor area which will further significantly increase the leasable portfolio and recurring rental revenues of the company in the near term,” it said.

    DoubleDragon said in addition to the seven buildings that will form the first tranche of DDMP REIT, two more buildings are planned to be infused into DDMP REIT after about two to three years. These buildings however are still under construction, also located in the DD Meridian Park complex.

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