AREIT Inc. obtained shareholders’ approval on the proposed P15-billion property-for-share swap with sponsor firm Ayala Land Inc. to ensure the company’s growth and expansion plans.
Shareholders in their first annual meeting on Friday also approved the plan to increase AREIT’s authorized capital stock to P29.5 billion from P11.7 billion to enable it to implement the P15.5-billion worth of commercial assets infusion from ALI in exchange for 483 million shares.
“Despite the challenging conditions of the pandemic, AREIT remained relatively resilient. We focused on opportunities to create value for our shareholders, democratize commercial real estate and promote reinvestment in the country,” AREIT president and chief executive Carol Mills said.
ALI and its subsidiaries plan to infuse 10 properties into AREIT’s leasing portfolio, boosting its gross leasable area from 344,000 square meters to 549,000 sq. m.
These are Vertis North Commercial Development (three office towers and a retail podium) in Quezon City; One and Two Evotech Buildings in Nuvali Sta Rosa, Laguna; Bacolod Capitol Corporate Center and Ayala Northpoint Technohub in Bacolod; the BPI Philam Life office units on Ayala Ave., Makati City; and Madrigal Business Park in Alabang.
These properties are strategically located within Ayala Land developments in key growth centers across the country and will diversify AREIT’s geographic reach and tenant base.
The properties have an excellent operating track record, with 98-percent average occupancy and a stable tenant mix of multinational companies and top players in the business process outsourcing industry.
After the infusion, ALI will own about 66 percent of AREIT’s total outstanding shares, demonstrating its strong support as the sponsor, while adhering to the prescribed minimum public ownership requirements under Philippine laws.
AREIT’s deposited property value will reach P52 billion with the addition of the new assets. This will further increase AREIT’s cashflows which will result in higher distributable income for shareholders.
After its IPO in August 2020, AREIT’s combined assets diversified and grew to P37 billion with its acquisition of The 30th Commercial Development in Pasig and Laguna Technopark lots.
AREIT achieved total revenues of P1.95 billion and EBITDA (earnings before interest, taxes, depreciation, and amortization) of P1.58 billion, three percent and four percent higher than its REIT plan, respectively.
AREIT also secured shareholders’ approval to increase the number of directors from seven to eight and elected Mariana Zobel de Ayala as a new member of the board. She will assume the position as soon as the Securities and Exchange Commission approved the amendment of the company’s articles of incorporation.
