AREIT inks P11.2 billion property for share swap with ALI

MANILA, Philippines — AREIT Inc. will enter into a second property-for-share swap with its sponsor, Ayala Land Inc., in a transaction valued at P11.2 billion.

AREIT president and CEO Carol Mills said the company is focused on increasing shareholder value.

“We are focused on delivering our commitment to grow our assets, diversify our geographic and tenant base and create more shareholder value with increasing dividends and price appreciation. With this new asset infusion, we foresee AREIT’s dividend per share to increase, in addition to the recently concluded asset infusions last year,” Mills said.

The transaction, targeted for completion this year, will involve six Cebu-based office buildings in exchange for 252.1 million AREIT primary common shares, as validated by a third-party fairness opinion. With this prospective infusion of Cebu assets, AREIT’s dividend per share is projected to increase further, the company said.

The six buildings are eBloc Towers 1 to 4 located at Cebu IT Park, ACC Tower and Tech Tower located at Ayala Center Cebu, which have a total gross leasable area (GLA) of 124,299 square meters, with an overall occupancy rate of 97 percent leased by major BPOs in the country.

The transaction is subject to the approval of AREIT shareholders at their annual meeting on April 21 and pertinent regulatory bodies.

AREIT made its debut in the stock market in 2020, delivering on its growth plans, which resulted in 92 percent total shareholder return from dividend yield and price appreciation.

It started with 153,000 square meters, equivalent to P30 billion of assets under management (AUM) in 2020. By December 2021, this has grown to 549,000 sqm equivalent to P53 billion in AUM. With this new asset infusion, AREIT will grow further and reach 673,000 sqm or P64 billion in AUM in 2022 – a 213 percent increase since AREIT went public. This growth exceeds its target to double in size within two years from its IPO.

Furthermore, last month, AREIT’s board of directors approved the declaration of dividends of P0.47 per share for the fourth quarter of 2021, to be distributed on March 25 to stockholders on record as of March 11. AREIT’s dividend per share increased from P0.44 in the third quarter to P0.47 in the fourth quarter after concluding its first asset-share swap of P15 billion in October 2021.

AREIT’s full-year dividends from its 2021 income reached P1.77 per share, up 34 percent from 2020 and 12 percent higher than its REIT plan projection during the IPO.