AREIT Inc. plans 2nd equity offer

MANILA, Philippines — AREIT Inc. (AREIT), the listed real estate investment trust (REIT) of the Ayala Group, is planning to do a second equity offer in 2022 and more equity funding in 2023.

This would help fund its goal to expand its asset portfolio.

“The company is also looking at a second equity offer in 2022, and a combination of debt and equity funding in 2023 to maintain an overall gearing level of between 30   and 35 percent of its deposited property value as it further increases its asset portfolio,” AREIT said in a regulatory filing.

AREIT intends to fund future acquisitions through a combination of debt and equity. At zero leverage during its initial public offering last year, AREIT has the opportunity to borrow up to 35 percent of its deposited property value and fund its 2021 acquisitions through debt, it said.

AREIT is the first REIT company in the Philippines to list in the local bourse.

As of Dec. 1, 2020, the company’s portfolio consists of four commercial properties namely Solaris One in Makati City; Ayala North Exchange mixed-use development in Makati City; McKinley Exchange, also in Makati, and Teleperformance Cebu, located within the Cebu IT Park.

It will also add The 30th commercial development for acquisition.

The 30th is a 19-story PEZA-accredited commercial development located along Meralco Avenue in Pasig completed in 2017.

The company believes that with The 30th, its revenues will continue to be driven by the resilient office sector, while volatility and occupancy risk from retail operations is well managed with the guaranteed building lease payments to AREIT.

“The 30th will contribute to AREIT’s operating performance and its ability to generate stable income and growth potential in the next three years,” AREIT said.

In all, AREIT is targeting to achieve 10 to 12 percent total shareholder return through organic growth and new acquisitions.

During the January to September 2020 period, AREIT raked in P1.4 billion in revenue.

This showed a three percent improvement from the REIT plan.