October 23, 2020 | 6:22 pm { bworldonline.com ]
The 30th is a shopping mall and office building located in Pasig City. -- Company handout
By Denise A. Valdez, Senior Reporter
AREIT, Inc. is buying Ayala Land, Inc.’s (ALI) 76,000-square meter (sq.m.) commercial center in Pasig City to expand its portfolio.
In a disclosure to the exchange on Friday, ALI’s real estate investment trust (REIT) said its board of directors has approved the P5.1-billion acquisition of The 30th in Meralco Avenue, Pasig City.
The 30th is a three-year-old commercial development along Meralco Avenue with a fully-occupied office building and an amenity retail podium.
Full ownership of the building and leasehold over the land will be bought by AREIT from ALI. The acquisition will be funded through debt, marking the company’s first debt in its record.
With the transaction, AREIT is set to increase its gross leasable portfolio to 246,000 sq.m. from 170,000 sq.m. at present.
“Simultaneous to the acquisition of the building by AREIT, (Ayala Land) will assign the long-term land lease to AREIT. AREIT (will) lease office spaces to tenants, and the retail podium to Ayala Land, under a fixed lease as operator of the retail spaces,” it said.
The acquisition of new assets is expected to boost AREIT’s net income and dividends in 2021. It also bought an office building in Cebu City last September using P1.45 billion from its public offering proceeds.
In a separate disclosure on Friday, AREIT said its board of directors has approved the issuance of retail bonds and/or corporate notes with the goal of raising up to P6.4 billion. The facility will have a maturity of up to 10 years and will support the company’s asset acquisitions.
The board likewise approved establishing bank credit facilities up to P12 billion.
AREIT currently has four properties in its portfolio: Teleperformance Cebu, a 12-story office building in Cebu City; Solaris One, a 24-story commercial building in Makati City; Ayala North Exchange, a two-tower mixed-use development in Makati City; and McKinley Exchange, a five-story commercial office in Makati City.
It conducted a P12.33-billion initial public offering (IPO) in August, marking the country’s first REIT listing in history. As required by REIT guidelines, AREIT must reinvest its offer proceeds to the Philippines within a year from its IPO.
Shares in AREIT at the stock exchange shed five centavos or 0.19% to close at P25.65 each on Friday.
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