Property giant Ayala Land Inc. (ALI) plans to recycle P5.11 billion in proceeds from the sale of The 30th commercial hub to AREIT Inc. for the development of seven commercial facilities and land parcels across the country.
The project pipeline consists of two mixed-use offices and malls located within Metro Manila and Cebu, one mall in Metro Manila, one office project also in Metro Manila, and three land parcels located in Cavite, Pampanga and Tarlac provinces, ALI and AREIT disclosed to the Philippine Stock Exchange on Monday.
All disbursements for such projects are intended to be distributed within one year upon receipt of the proceeds from the sale of The 30th to AREIT, the pioneering real estate investment trust (REIT) sponsored and 54-percent owned by ALI.
The first project is Parklinks, a joint venture with Eton Properties, on the border of Pasig and Quezon City. This a five-story mall with about 50,000 square meters of gross leasable area (GLA) plus a business process outsourcing (BPO)-focused tower with about 13,000 sqm of GLA. This project is currently in the preconstruction phase.
The second mixed-use project is the ongoing construction of Gatewalk Central in Cebu, a joint venture with Aboitiz Land. This will have a four-level retail space with 115,000 sqm of GLA and a nine-level office space on top with 20,000 sqm of GLA. The project is 50-percent complete.
The third project is One Ayala Malls in Makati, a five-story regional mall with trade hall facilities and a total GLA of 50,000. The project is currently 61-percent complete.
Another project is One Ayala BPO, a two-tower office development that will create 74,000 sqm of GLA. This is 64-percent completed.
The remaining projects involve land acquisition in Cavite, Pampanga and Tarlac.
“The transfer of funding from Ayala Land to the relevant Ayala Land subsidiary may be through a capital infusion or through shareholder financing,” ALI said in its disclosure.
Meanwhile, The 30th in Pasig will start to contribute to AREIT’s revenues starting this month. This is expected to boost income that can be distributed to shareholders in the form of dividends.
Together with the recent acquisition of 98,000 sqm of leased land in Laguna Technopark, AREIT’s recurring income portfolio is expected to reach 344,000 sqm, double its footprint from the level during its initial public offering five months ago. This also brings AREIT’s total property value to P37 billion.
The 30th Mall, completed in 2017, is currently under a 36-year land lease agreement between ALI and the land owner, MBS Development Corp. ALI will assign the land lease contract to AREIT as part of the condition of the sale.
The office tower currently has an average occupancy of 94 percent. The office building is predominantly leased to BPOs (87 percent of GLA) and other locators (13 percent of GLA). Standard office lease terms are fixed for a period of five years and renewable for another five years. INQ