AREIT Inc., the real estate investment trust firm owned by Ayala Land Inc., said Thursday it will continue to acquire income-producing commercial properties to enhance returns to investors and increase potential opportunities for income and capital growth.
The three-year investment strategy of AREIT Fund Managers Inc., the fund manager of AREIT, showed calls for the acquisition of high-quality commercial assets in prime locations, including freehold and logistics/industrial properties.
It said among the criteria for acquisition were properties with stable income and cash-flow derived from solid tenant mix of top multinational and local business process outsourcing and traditional headquarter office locators.
The planned acquisitions will enable the company to achieve 10-percent to 12-percent total shareholder returns while also expanding asset portfolio.
It is expected to maintain AREIT’s leadership in the Philippine REIT sector in terms of asset size and market capitalization.
“Overall, AREIT intends to fund future acquisitions through a combination of debt and equity. At zero leverage during initial public offering, AREIT has the opportunity to borrow up to 35 percent of its deposited property value and fund its 2021 acquisitions through debt,” AREIT said.
“The company is also looking at a second equity offer in 2022, and a combination of debt and equity funding in 2023 to maintain an overall gearing level of between 30-35 percent of its deposited property value as it further increases its asset portfolio,” it said.
AREIT’s company’s portfolio, as of end-2020, consisted of four commercial properties including Solaris One, Ayala North Exchange, McKinley Exchange and Teleperfomance Cebu.
It is also in the process of acquiring The 30th—a commercial development in Pasig City owned by Ayala Land.
The 30th has gross leasable area of 75,912 square meters in an office building and a retail podium supported by three-level basement parking. The office portion has GLA of 47,883 sq. m. while the retail podium has 28,029 sq. m.
“With The 30th, AREIT’s revenues will continue to be driven by the resilient office sector, while volatility and occupancy risk from retail operations is well managed with the guaranteed building lease payments to AREIT. The 30th will contribute to AREIT’s operating performance and its ability to generate stable income and growth potential in the next three years,” the company said.
