AREIT Inc., the listed real estate arm of the Ayala Group, said Wednesday it will acquire a 276-hectare property in Zambales from Buendia Christiana Holdings Corp., a wholly owned subsidiary of ACEN Corp., via property-for-share swap valued at P6.77 billion.
AREIT and renewable energy company ACEN share Ayala Corp. as common shareholder.
AREIT will issue to BCHC a total 199.1 million new common shares valued at P34 each, a 3.75 percent premium to the 30-day volume weighted average price of P32.77. The value was within the price range provided in the appraisal report of FTI Consulting’s Fairness Opinion and Cuervo Appraisers, Inc.
AREIT expects the sprawling Zambales property to contribute to its operating cashflows over the next 25 years and increase the dividends per share upon approval. The company is projecting an annual cash flow escalation of 1.5 percent valued at a 6.92 percent capitalization rate.
Compared to AREIT’s estimated yield of 6.3 percent from its existing assets, it is dividend accretive based on the swap price of P34 per share.
AREIT will reach a total building gross leasable area of 762,000 square meters and leased industrial land of 286 hectares at an aggregate Assets-Under-Management (AUM) value of P93 billion upon transaction completion.
The infusion of BCHC’s industrial land into AREIT’s existing portfolio of malls, offices, and hotels further diversifies the real estate investment trust’s leasing portfolio and reduces asset sector concentration risk.
Upon issuance of AREIT shares in exchange for the land, Giga Ace 8, Inc., a wholly-owned subsidiary of ACEN, will lease the land from AREIT for 25 years at a guaranteed fixed rent with annual escalation and with the option to renew for another 25 years.
As a result of the share swap, BCHC—and effectively its parent ACEN—will own 7.7 percent of AREIT once the shares are issued in March. The shares will be listed on the Philippine Stock Exchange.
