AREIT IPO priced at P27 per share

Ayala Land-sponsored AREIT Inc., the first real estate investment trust (REIT) to debut on the local stock exchange, has priced its initial public offering at P27 per share.

This finalizes the base size of this landmark REIT offering at P12.35 billion, which will rise to P13.57 billion including the overallotment option.

The final price was reduced from the indicative maximum price of P30.05 per share.

AREIT will offer a maximum of 502.57 million shares, inclusive of the over-allotment option of around 45.69 million. The base offer consists of 47.86 million primary common shares and 409.02 million secondary common shares.

The IPO will run ‪from July 27 to August 3‬ while listing is slated for ‪August 13.‬

REIT is a corporation that primarily invests in income-generating real estate such as office spaces, shopping malls, serviced apartments, and even hotels, hospitals and warehouses. It gives investors an opportunity to invest directly in the finished projects rather than the developer itself. Developers, on the other hand, can use this structure to recycle capital for further property development and expansion initiatives.

As an asset class, the main selling point of REIT is it is required to declare dividends of at least 90 percent of its distributable income.