MREIT to grow office asset size

MANILA, Philippines — MREIT, the soon-to-list Andrew Tan-led real estate investment trust (REIT), plans to grow its office asset size to one million square meters as part of its goal to become  the largest REIT in Southeast Asia.

The target is to achieve this within the next five to 10 years as it aims to be the “country’s fastest growing REIT with the longest expansion pipeline” among listed REITs on the Philippine Stock Exchange.

Next year, Megaworld plans to infuse an additional 100,000 sqm of prime office assets into MREIT’s portfolio. This will increase MREIT’s asset size to around 324,000 sqm by end-2022.

MREIT president and CEO Kevin Tan said this would further increase to 500,000 sqm by 2024.

“We are committed to reaching half a million square meters by 2024, and are highly confident of our ability to reach one million square meters in the near future so that we can be the largest office REIT in Southeast Asia,” Tan said.

MREIT’s initial portfolio of approximately 224,431 square meters consists of 10 prime office buildings in three of Megaworld’s most established township locations that are popular among the biggest BPO companies operating in the Philippines.

The company is targeting to list on the Philippine Stock Exchange on Sept. 30.

He said the goal is to put the Philippines and MREIT on the global REIT map because of the size and quality of its REIT portfolio and tenant base.

“We believe we can easily achieve this because Megaworld already has 1.2 million sqm of existing office buildings and has a robust pipeline of new office developments spread across 26 business parks across the country,” Tan said.

MREIT is bullish about the prospects of the Philippine BPO sector and Megaworld expects to maintain its undisputed leadership position as the Philippine office landlord of choice for the world’s leading IT and BPO companies, Tan said.

Its initial portfolio includes 1800 Eastwood Avenue, 1880 East Avenue, E-commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley Building, 18/20 Upper McKinley Building, One Techno Place Iloilo, Richmonde Tower and Richmonde Hotel Iloilo.

“Our current portfolio has been carefully curated to include only Grade A PEZA-accredited buildings with mainly BPO and multinational tenants. MREIT’s strategy is to be very focused on high quality office buildings with high quality tenants that are located inside an already established township,” Tan said.

MREIT’s initial public offering price was set at P16.10 per share, which translates to a projected 2022 dividend yield of 5.7 percent.

“The IPO was priced at an attractive level to provide IPO investors a compelling entry opportunity to become long term partners in MREIT’s goal of becoming the Philippines’ fastest growing REIT backed by the country’s largest office landlord. As a result, the institutional book building attracted strong interest from both long only foreign investors as well as domestic institutional investors,” said BDO Capital president Ed Francisco.

The estimated net IPO proceeds of P14.7 billion, together with the expected cash proceeds from the impending asset injection into MREIT by its sponsor, Megaworld, will be reinvested by Megaworld into 15 projects over the next 12 months.