July 8, 2020 | 12:08 am [ bworldonline.com ]
By Denise A. Valdez, Reporter
THE Securities and Exchange Commission (SEC) may soon approve the application of Ayala Land, Inc. (ALI) to launch a P15-billion real estate investment trust (REIT) offering.
In a phone call with BusinessWorld on Tuesday, SEC Commissioner Ephyro Luis B. Amatong said the regulator is targeting to greenlight ALI’s registration statement “very soon,” adding it may be within the third quarter.
“We hope to finish the process for the ALI REIT soon,” he said. “Target is very soon.”
Aside from ALI, Mr. Amatong said several others are also looking to launch their REITs, but none have submitted a registration statement so far.
ALI submitted its registration statement for a REIT offering to the SEC in February. The company’s plan is to do a primary offer of up to 47.86 million shares and a secondary offer of up to 430.78 million shares, with an over-allotment option of up to 23.93 million shares, each priced at P30.05, which would raise up to P15.1 billion in net proceeds.
The plan involves three office buildings of ALI in Makati City: the 24-storey Solaris One, the mixed-use development Ayala North Exchange, and the five-storey McKinley Exchange.
ALI said in April it was still pursuing its REIT plan despite the coronavirus pandemic, but noted the timing of the offering will depend on market conditions. The company did not provide an updated timetable on Tuesday.
Should it proceed, ALI’s REIT offering would be the country’s first REIT offering, after over 10 years since the REIT law was passed. The SEC launched adjusted REIT guidelines in January to attract property developers to tap the financing scheme.
Aside from ALI, DoubleDragon Properties Corp. had previously announced a plan to do an P11-billion REIT offering in the fourth quarter involving 200,000 square meters of leasing assets.
ALI said in its prospectus that the proceeds from its REIT offering will be allocated to future investments, such as buying Teleperformance Cebu from its subsidiary ALO Prime Realty Corp., and other real estate properties in Metro Manila and key regions.
Meanwhile, ALI said in a statement it remains optimistic in the property sector as investors trust in the attractive returns of having a beefed up property portfolio.
“We have seen in past crises how the property sector has constantly been able to recover after a downturn with values appreciating over time. Given our country’s stable economy, it remains one of the best options for investment today,” Ayala Land Estates, Inc. Assistant Vice-President Cris Zuluaga was quoted as saying.
Earnings of ALI in the first quarter dropped 41% to P4.3 billion due to lower bookings and project completions because of the Taal Volcano eruption and the coronavirus pandemic.
Shares in the company at the stock exchange fell 40 centavos or 1.14% to P34.70 each on Tuesday.
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