MANILA, Philippines — MREIT Inc., the real estate investment trust (REIT) company of the Andrew Tan Group, has priced its initial public offering (IPO) at P16.10 each share to raise roughly P15 billion, lower than its P27.3 billion initial target.
At the current issue size, the institutional tranche was close to two times oversubscribed, MREIT president Kevin Tan said yesterday.
The final price is lower than the P22 per share indicated in its registration statement.
MREIT plans to offer secondary shares of up to 1.2 billion common shares, proceeds of which will be used to expand the Tan Group’s office portfolio.
Megaworld will be receiving more proceeds once it completes the impending cash injection of three buildings into MREIT, which is slated to be completed by early 2022. The resulting total proceeds is what the sponsor intended to raise to fund its 21 projects all over the country during the next 12 months.
Tan said the company decided to price the deal at an attractive level to provide more upside to IPO investors who will be its long-term partners in this new journey.
“At this IPO price, MREIT will be offering investors an attractive dividend yield of 5.65 percent, to be distributed quarterly, and at the same time, we will be giving them exposure to a high quality, fast-growing portfolio of assets,” he said.
He said MREIT, as Megaworld’s flagship REIT, is structured to deliver fast growth and strong aftermarket performance.
Immediately post-IPO, Megaworld will be retaining a 62.5 percent stake to capture more near term and long term valuation upsides for its shareholders as MREIT actively grows its portfolio with the maturation of the overall REIT industry in the Philippines, Tan said.
MREIT expects both its market cap and float to grow over time as it successfully executes on its aggressive growth trajectory.