AREIT Inc. said Thursday its board approved several transactions worth P29.79 billion, the largest property infusion in the listed real estate investment trust of the Ayala Group, accelerating its expansion and potentially increasing dividend payout.
AREIT said it will issue 841.2 million common shares, with a combined value of P28.6 billion, to various Ayala firms to acquire an office building, two shopping malls, two hotels and a sprawling property that will be turned into a solar farm.
The acquisition of SEDA Lio in El Nido, Palawan from Ayala Land Inc.’s subsidiary Econorth Resort Ventures Inc., will be paid for with cash worth P1.19 billion.
In exchange for shares, AREIT will get from Ayala Land and its subsidiaries, Greenhaven Property Ventures Inc. and Cebu Insular Hotel Co. Inc. the Ayala Triangle Tower Two Office Building, Greenbelt Mall 3 and 5, Holiday Inn and Suites Makati, and SEDA Ayala Center Cebu.
From Buendia Christina Holdings Corp., a unit of ACEN Corp., the renewable energy arm of Ayala Corp., AREIT will acquire in exchange for shares a 276-hectare industrial land located in Zambales. Once the ownership transfer is complete, Giga Ace 8, another ACEN unit, will lease the land for 25 years at a guaranteed fixed rent escalating every year, and with the option to renew for another 25 years.
Once completed, the deal will increase the value of assets under management of AREIT, the first first and currently the largest REIT, to P117 billion, with gross leasable building area of more than one million square meters, and its leased industrial land area to 286 hectares by 2024.
The acquisition of prime commercial properties along with industrial land is aligned with AREIT’s objectives to significantly expand and diversify its portfolio to capitalize on various growth opportunities across real estate sectors. The land acquisition will also afford AREIT the potential for capital appreciation.
“We believe in the synergistic goals between ALI as Sponsor and AREIT. ALI has infused a total of P59 billion in assets into AREIT since its IPO in 2020. The inclusion of Ayala Tower Two and Greenbelt 3 and 5 – some of ALI’s prime assets in Makati, is a testament to our continued commitment to AREIT’s long-term growth,” said ALI president and chief executive officer and AREIT chairman Anna Ma. Margarita B. Dy.
Ms. Carol T. Mills, AREIT President and CEO, said, “We are laying the groundwork to accelerate AREIT’s expansion. With Ayala Land’s deep pipeline of commercial assets as well as other strategic properties in the Ayala Group, AREIT can have the capacity to grow immensely and attain a market presence at par with some of the REIT players in the region,” said Carol Mills, AREIT president and CEO. “We deliberately planned the acquisitions to have a healthy mix of malls, offices, hotels, and industrial properties, which broadens our portfolio and mitigates concentration risk to a particular sector,” she added.
