Megaworld REIT infusing additional P5.3 billion office assets

MANILA, Philippines — MREIT, the real estate investment trust vehicle of Andrew Tan-led Megaworld, will acquire P5.3 billion worth of prime office properties in PEZA-accredited zones, raising its portfolio value to P65 billion.

MREIT president and CEO Kevin Tan said this marks the first time the company would infuse office assets from its McKinley West township, which houses a number of business process outsourcing (BPO) firms operating in the country.

“This township location also commands one of the highest rental rates in the Greater Manila area because of the high demand for office spaces in this area,” Tan said.

The objective is to accelerate MREIT’s growth plans and double its  portfolio by the end of this year, while ensuring that the acquisitions will be accretive to shareholders.

“We aim to deliver an attractive total return to MREIT investors,” Tan noted.

The acquisition makes up the initial tranche of the company’s P20-billion property-for-shares acquisition plan for 2022.

The new acquisitions will have a total gross leasable area of 44,567 square meters, which will increase the company’s asset portfolio by 16 percent to 325,000 sqm GLA from the current portfolio of 280,000 sqm.

The property infusions include Festive Walk 1B and Two Global Center in Iloilo Business Park, and One West Campus and Five West Campus in McKinley West, Taguig City. At present, the four prime office properties have an average occupancy rate of 96 percent, above the industry level of between 81 and 84 percent.

With these acquisitions, MREIT will have 100 percent ownership of the two Iloilo Business Park properties, and 80 percent economic interest in the two McKinley West office towers, Tan said.

The properties will be exchanged for 263.7 million MREIT primary common shares at a share price of P20 per share, representing a 1.4 percent premium over the volume weighted average closing price for a period of 40 trading days until March 30 this year, based on appraisal reports and third party fairness opinion.

In December last year, MREIT also acquired four prime, grade A PEZA-accredited office properties in Iloilo Business Park and McKinley Hill.

Once the new acquisitions are completed, MREIT’s portfolio will cover 18 office properties in four Megaworld premier townships.