Stock Commentary

AREIT shareholders to get the benefit of ACEN land income by Q3/24

Merkado Barkada
AREIT shareholders to get the benefit of ACEN land income by Q3/24

AREIT [AREIT 29.10, down 2.4%; 406% avgVol] [link] provided an update on its transaction with ACEN [ACEN 4.97, up 1.4%; 88% avgVol] to acquire a plot of industrial land that is leased by a solar power plant. In the disclosure, AREIT indicated that it will apply to the SEC for the issuance of the shares to ACEN in March 2024, and apply to the BIR for the Certificates Authorizing Registration (CAR) in Q3 of that year. AREIT expects to receive SEC approval for the issuance in Q3/24 and the CAR from the BIR in Q4/24. AREIT then said that it expects to receive the PSE’s approval for the listing of the shares in Q2 or Q3 of 2025, and therefore ACEN would not be able to do anything with its new shares until such PSE approval is received. AREIT said that it would begin to accrue income from the lease on the property starting from the beginning of Q3/24.

MB bottom-line: It will be interesting to look back at this transaction in a year’s time and see how things have progressed. By the end of September 2024, will the US Federal Reserve have pivoted and started to actually cut interest rates? Will the BSP continue to echo the general thrust of the Fed, or will it have cut rates ahead of the Fed? When rates fall, REIT yields fall, and when REIT yields fall, REIT stock prices rise. 




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