By Zinnia B. Dela Peña (The Philippine Star) Updated September 30, 2010 12:00 AM
MANILA, Philippines - Property giant Ayala Land Inc. (ALI) has formed a new P1.2-billion company that will serve as vehicle for its planned real estate investment trust (REIT) listing.
In a disclosure to the Philippine Stock Exchange, ALI said it filed yesterday with the Securities and Exchange Commission the articles of incorporation of AyalaLand Commercial REIT Inc. (ALCRI), which will own and select investment properties for long-term investment.
Among these properties include shopping center and office assets currently owned by ALI which are mature, have recurring income streams and stable occupancy rates.
ALI said ALCRI will carefully maintain its attractiveness and marketability with the objective of providing shareholders with a competitive rate of return through regular and stable cash distributions.
ALCRI will also seek acquisition opportunities for additional high quality assets that will further enhance and grow its portfolio.
Out of ALCRI’s initial authorized capitalization of P1.2 billion, P300 million has already been subscribed and paid up.
ALI previously said it was looking at a $300-million REIT offering possibly in the fourth quarter this year.
Antonino T. Aquino, president of ALI, said the initial public offering (IPO) timing and size would depend on how soon the implementing rules and regulationS (IRR) would be finalized.
The Department of Finance is overhauling the rules on REITs to justify tax incentives to be granted to issuers. It wants to raise the minimum public float to 50 plus one percent instead of the 33.3 percent as proposed by the SEC.
The company has appointed UBS and JP Morgan as its joint advisors.
A REIT is an instrument that trades like a stock on major exchanges. It provides small and large investors with options to participate directly in the ownership of large-scale real estate projects.
REITS have been widely adopted in the United States, Australia and more recently Japan, Singapore, Hong Kong and Taiwan.
Under the draft IRR, a company applying to list REITs on the stock exchange must have a minimum capitalization of P300 million and distribute annually at least 90 percent of its distributable Income as dividends to its shareholders.
A REIT may invest in real estate located in the Philippines, whether freehold or leasehold. At least 75 percent of the deposited property of the REIT shall be invested in, or consist of, income generating real estate.
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