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Ayala Land’s AREIT ventures into industrial space leasing

/ 05:22 AM January 07, 2021

Real estate investment trust (REIT) pioneer AREIT Inc. has forayed into the industrial leasing space with the acquisition of a 9.8-hectare land in Laguna Technopark for P1.1 billion.

The land—which is being leased by electronics manufacturer Integrated Micro-Electronics Inc. (IMI) for the next seven years—was sold by Technopark Land Inc. The acquisition price is value added tax-inclusive.

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IMI is among the leading players in global manufacturing and technology solutions and is a listed subsidiary of Ayala Corp., the parent conglomerate of AREIT’s sponsor and controlling stockholder Ayala Land Inc.

Laguna Technopark is a 471-hectare premier industrial park spanning portions of Biñan and Santa Rosa in Laguna province currently managed by AyalaLand Logistics Holdings Corp., a unit of Ayala Land Inc.

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“The acquisition of this land will directly contribute to ­AREIT’s income starting this month, adding to the earnings generated by the company’s existing buildings. This will increase the distributable income to its shareholders, demonstrate AREIT’s ability to deliver stable and regular dividends, and strengthen its potential for capital appreciation,” AREIT said in its disclosure to the Philippine Stock Exchange (PSE) on Wednesday.

Together with the acquisition of The 30th commercial hub in Pasig City, this will bring AREIT’s portfolio to 344,000 square meters of leasable space, double its portfolio of 171,000 sqm when it went public five months ago.

This latest acquisition is seen to bring up AREIT’s total property value to P37 billion, the disclosure said.

“Aside from being value-accretive to investors, AREIT’s assets promote job creation for Filipinos. AREIT’s office buildings are home to top local and global companies that employ over 50,000 Filipino workers including this newly acquired land where over 5,000 jobs are generated,” said Carol Torres-Mills, president and chief executive officer of AREIT.

AREIT aims to conduct a follow-on offering in 2022 and achieve a 10-12 percent total shareholder return in the next three years through a mix of organic expansion and new acquisitions, based on its three-year investment strategy.

It has committed to grow its asset portfolio in terms of sector, location and income contribution, funded through 30 to 35 percent leverage and/or equity.

Overall, AREIT seeks to maintain its leadership in the Philippine REIT sector in terms of asset size and market capitalization.

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It is so far the only REIT to list on the PSE although a few other companies have indicated plans to pursue the same path. Its sponsor, Ayala Land, owns 54 percent of AREIT while the rest is held by the investing public.

AREIT distributes at least 90 percent of its distributable income from properties with strong tenant demand in its portfolio. Its principal investment strategy is to invest in income-generating real estate properties that meet a select set of criteria. It intends to fund future acquisitions through a combination of debt and equity.

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TAGS: AREIT Inc., Integrated Micro-Electronics Inc. (IMI), real estate investment trust (REIT)
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