MANILA, Philippines — Investors gave Megaworld Corp’s real estate investment trust a warm reception as it listed on the Philippine Stock Exchange.
Minutes after the bell rung in the trading floor on Friday, MREIT Inc, priced at P16.10 in its initial public offering, saw its share price climb steadily. MREIT shares climbed to an intraday high of P17.16.
When the local bourse closed, shares of the Megaworld-backed REIT firm finished trading at listing day at P16.70 each, till up by 3.73%.
This is the fifth REIT to join Philippine markets, but its debut has been one of the splashiest. For Aniceto Pangan, an equity trader, this was because REIT offerings proved attractive since they would provide stable dividends. Under the law, 90% of a REIT’s income has to be rewarded to investors.
“Mainly, the property assets has already increased in occupancy rate from end of March this year and secondly, the volatile market makes MREIT, other REITs a more attractive investment than the other as it provides stable income through dividends,” he said in a text message.
As it stood, MREIT’s current portfolio comprised of 10 office buildings spanning 224,431 square meters located in three townships developed by Megaworld. The firm said these locations, Eastwood City, McKinley Hill, and Iloilo Business Park were popular locations for business process outsourcing companies in the country.
Sought for comment, Luis Limlingan, head of sales at Manila-based brokerage Regina Capital, listed factors that drove MREIT’s price today, such as a stable BPO tenant base, all its buildings were accredited by Philippine Economic Zone Authority, and “potential acquisitions to boost dividend yields.”
By 2023, Megaworld is eyeing to infuse office and commercial assets located in Uptown Bonifacio into its REIT firm by 2023.
Leading up to its IPO, MREIT trimmed the size and price of its offer, in the hopes of attracting more investors with higher dividend yields. Even then, the firm sold 844.3 million common shares at P16.10 apiece during its maiden share sale. If robust demand shows, the offer contained an overallotment option of 105.5 million common shares.
Gross proceeds from its maiden share sale are expected at P15.3 million.
“Megaworld REIT promises to be the country’s fastest-growing REIT. I am optimistic that the company can achieve this given its unmatched track record in property development. Its credible reputation provides Megaworld with a strong springboard for this public offering,” Finance Secretary Carlos Dominguez III said in a message.