Megaworld plans biggest REIT IPO worth P27.3 billion

MANILA, Philippines — Andrew Tan-led Megaworld Corp. has jumped into the lucrative real estate investment trust bandwagon, with a planned P27.3-billion REIT offering slated this year.

MREIT Inc., a subsidiary of Megaworld, submitted yesterday its registration statement with the Securities and Exchange Commission (SEC) for an initial public offering (IPO).

“We are going to launch the largest REIT in the country. Our goal is not just to be the largest REIT by portfolio size in the Philippines but in Southeast Asia,” MREIT president and CEO Kevin Tan said in a press conference yesterday.

He said the offering would enable investors to partake in the success of the Megaworld Group’s township developments.

“This is not just an office REIT. It is a township REIT,” Tan said, noting that as the pioneer of township developments in the Philippines, Megaworld’s offices and hotel assets are in prime townships in the country.

Subject to regulatory approvals and market conditions, Megaworld’s REIT plans to offer as much as 1.2 billion common shares at a price of up to P22 per share, with proceeds to be reinvested to further expand its office portfolio.

Assuming full exercise of the overallotment option, the IPO would be the biggest REIT offering in the Philippines.

This would represent up to 49 percent of the total issued and outstanding shares of MREIT, assuming full exercise of the overallotment option.

Through a property-for-share swap, Megaworld injected into MREIT a portfolio of 10 office, retail and hotel assets with an aggregate gross leasable area of 224,430 square meters, located in its three prime townships: Eastwood City in Quezon City, McKinley Hill in Taguig City, and Iloilo Business Park in Mandurriao, Iloilo City.

“Our REIT includes properties in three of our most sought-after premier township developments of Eastwood City, McKinley Hill and Iloilo Business Park, which are home to around 200,000 BPO and other office workers today. Our tried-and-tested signature concept of the township has attracted over 200 BPO and multinational companies to locate with us through the years since we started our first-ever Eastwood cyberpark in 1999,” Tan said.

The MREIT portfolio of assets include 1800 Eastwood Avenue, 1880 Eastwood Avenue, E-Commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley, One Techno Place, Richmonde Tower and Richmonde Hotel Iloilo.

BDO Capital & Investment Corp. (BDO Capital), Credit Suisse (Singapore) Ltd., UBS AG Singapore Branch, and DBS Bank Ltd. were mandated as joint global coordinators for the IPO while BDO Capital is the domestic lead underwriter.

To date, Megaworld has the largest portfolio of leasable office spaces in the Philippines, with around 1.4 million square meters of office properties in 10 major cities across the country, according to Leechiu Property Consultants.

In Bonifacio Global City in Taguig, Megaworld also holds the largest office leasable portfolio.

Companies that own and operate income-generating real estate assets are considered REIT companies. These companies include offices, apartment buildings, hotels, warehouses, shopping centers and highways.

Two REIT companies have so far listed at the PSE. These are Ayala Land’s AREIT Inc. and Double Dragon’s DDMP REIT.