SEC OKs Megaworld, MREIT property-for-share swap plan

MANILA, Philippines — The Securities and Exchange Commission (SEC) has approved the property-for-share swap plan of MREIT Inc. and its sponsor Megaworld Corp.

The SEC last week issued its confirmation of the valuation of the property-for-share swap transaction between Megaworld Corp. and MREIT, wherein Megaworld will transfer four properties to MREIT in exchange for shares.

These properties are four of Megaworld’s Grade A buildings located in PEZA-registered zones, namely Two Global Center and Festive Walk 1B, located in Iloilo Business Park, and One West Campus and Five West Campus in McKinley Hill in Fort Bonifacio, Taguig.

These properties will be transferred to MREIT and, in exchange, Megaworld will get 263.7 million common shares of MREIT with a total subscription price of P5.3 billion.

MREIT shall also apply for the listing of the shares with the Philippine Stock Exchange upon the issuance of the shares.

Pursuant to the amended Deed of Exchange of property for shares for this transaction, MREIT shall start recognizing income from the four properties in the first quarter of 2023.

MREIT president and CEO Kevin Tan said once complete, income from the assets would be recognized retroactively beginning Jan. 1 this year.

“The acquisition will increase MREIT’s property value by nine percent to P64.5 billion and will provide added growth in line with our promise to deliver sustainable value to our shareholders,” Tan said.

The acquisition will expand MREIT’s portfolio by 16 percent to 325,000 square meters covering 18 office properties in four Megaworld premier townships: 1800 Eastwood Avenue, 1880 Eastwood Avenue and E-Commerce Plaza in Eastwood City; One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley and World Finance Plaza in McKinley Hill; One Techno Place, Two Techno Place, Three Techno Place, One Global Center, Two Global Center, Festive Walk 1B and Richmonde Tower in Iloilo Business Park; and One West Campus and Five West Campus in McKinley West.

In October 2021, MREIT made its debut at the PSE. A year after listing, MREIT has grown its portfolio size by 25 percent to 280,000 sqm and its property value by 20 percent to P59.3 billion.