AREIT to add P15B worth of Ayala Land assets to portfolio
Real estate investment trust (REIT) pioneer AREIT Inc. is expected to bump up its earnings starting this year with its takeover of 10 commercial property assets valued at P15 billion, the biggest of which is the Vertis North commercial development in Quezon City.
AREIT is set to hike its deposited property value in its portfolio to P52 billion from P37 billion through this property-for-share swap transaction with its sponsor, Ayala Land Inc. (ALI).
A total of 205,000 square meters of leasable space, primarily composed of office leasing properties located within ALI’s prime estates in the country, will form part of the new asset infusion.
Other assets
Aside from Vertis North, which has three office buildings and a retail podium, other assets to be infused are: One and Two Evotech in Nuvali Sta. Rosa, Laguna; Bacolod Capitol Corporate Center and Ayala Northpoint Technohub, both located in Negros Occidental; and office condominium units at BPI-Philam Life buildings in Makati CBD and Madrigal Business Park in Alabang.
“Notwithstanding ALI’s increased ownership, AREIT’s dividend per share is projected to grow with the addition of these new assets. At the exchange price of P32 per share, these assets to be infused are yield accretive to AREIT at 6 percent,” AREIT president and chief executive Carol Mills said in a press statement on Thursday.
AREIT’s yield from its existing assets is approximately 5.4 percent.
Compelling yield
“The priority of AREIT is to deliver to its investors a compelling yield that grows over time. This is derived from its stable recurring income with contracted escalations, as well as the addition of new assets in the portfolio. Through our sponsor Ayala Land, AREIT is in a position to grow with ALI’s healthy pipeline of prime commercial properties nationwide,” Mills added. Vertis North has 125,000 sq m of leasable space and a retail podium of 39,000 sq m. The three office buildings in the complex are 97-percent occupied and leased to large business process outsourcing locators, including Google Services Philippines, Teleperformance, Telus and Global Payments.
The retail component of Vertis North is operated by a wholly owned subsidiary of ALI under the Ayala Malls brand and will pay a monthly guaranteed building lease to AREIT for a period of 36 years, ensuring stable income for the latter.
