Megaworld Corp., along with Travellers International Hotel Group, Inc. (TIHGI) and Southwoods Mall, Inc. (SMI), has signed a Memorandum of Understanding (MOU) with listed real estate investment trust MREIT, Inc. to pursue a strategic property-for-share swap.
All four companies have billionaire Andrew Tan as major shareholder.
The transaction involves select income-generating real estate assets, referred to as the “Target Growth Assets,” with the aim of accelerating MREIT’s portfolio expansion.
Under the agreement, MREIT will acquire the properties, while the Asset Owners will subscribe to new primary common shares in the REIT. Final terms, including the Swap Price and share allocation, are contingent on property valuations, which will be conducted by FTI Consulting Philippines using the Discounted Cash Flow and Direct Capitalization Methods.
The valuation will be submitted for Securities and Exchange Commission (SEC) approval, followed by listing applications with the Philippine Stock Exchange.
The transaction aligns with MREIT’s goal to double its gross leasable area to 1 million square meters by end-2027, representing the fifth wave of asset infusion into its portfolio. It is structured as a tax-free exchange under Philippine law, potentially streamlining execution while maximizing investor returns.
The deal is expected to result in the exchange of assets for as much as 1.8 billion MREIT shares, which at Friday’s closing price is worth a total P24.8 billion.
Key assets include Southwoods Mall, a 58,000-square-meter lifestyle center in Laguna, and Newport World Resorts, TIHGI’s flagship leisure property in Pasay City. Megaworld, the REIT’s sponsor, currently holds nearly 60 percent of its shares, and both SMI and TIHGI are affiliates within its corporate network.
The transaction will be presented for stockholder approval at MREIT’s annual meeting. Once approved, the REIT will proceed with formal execution and regulatory filings, including Certificates Authorizing Registration from the Bureau of Internal Revenue.
The move could strengthen MREIT’s income-generating base while consolidating affiliated properties under a publicly listed platform, signaling continued strategic growth for Megaworld and its network of subsidiaries.
