Ayala Land eyes P14 billion from first REIT listing

MANILA, Philippines — The Ayala Group has filed with the Securities and Exchange Commission its application for a real estate investment trust (REIT) offering, estimated to raise up to P14 billion.

Ayala Land Inc. subsidiary AREIT Inc. will offer 48.86 million new common shares and 430.775 million existing common shares with an overallotment option of up to 23.93 million shares.

AREIT set the maximum offer price at P30.05 each share.

The primary offer will generate P1.35 billion while the secondary offering is expected to raise P12.7 billion if the overallotment option is exercised.

Proceeds from possibly the country’s first REIT listing will be used for future investments in real estate properties in Metro Manila and other key regions in the Philippines.

At present, AREIT’s portfolio consists of three commercial buildings in Makati City, namely Solaris One, Ayala North Exchange and McKinley Exchange.

ALI filed the application less than a month after the Duterte administration issued the revised implementing rules and regulations for the REIT Act of 2009.

The REIT Act allows REIT companies to list and trade their shares of stock in the Philippine Stock Exchange (PSE) as an alternative means to raise funds for property development and expansion initiatives. Corporations that own and operate income-generating real estate assets are considered REIT companies.

These include offices, apartment buildings, hotels, warehouses, shopping centers and highways.

Investing in REITs will allow investors to earn dividend-based income and diversify their portfolio.

ALI’s initiative to pioneer REITs in the Philippines reflects its confidence in the local economy. The company hopes to contribute to the development of a REIT market in the country.