AREIT expands property portfolio after swap deal with ALI

Real estate investment trust pioneer AREIT Inc. has consummated a deal to acquire P15.46 billion worth of commercial property assets from Ayala Land Inc. (ALI), thus bulking up its portfolio of leasable assets.

AREIT disclosed to the Philippine Stock Exchange on Tuesday that it had executed a deal with ALI and various subsidiaries for the issuance of 483.25 million of its primary common shares in exchange for the assets. At the exchange price of P32 per share, the new assets are yield accretive to AREIT at 6 percent.

The deal scales up AREIT’s deposited property value in its portfolio to P52 billion from P37 billion. The latest transaction involves a total of 205,000 square meters of leasable space, primarily composed of office leasing properties located within ALI’s prime estates.

The biggest of the new assets gobbled up by AREIT is the Vertis North commercial development in Quezon City, which has 125,000 square meters of leasable space and a retail podium of 39,000 square meters.

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 other assets included in the deal 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.

The retail component of Vertis North is operated by a wholly owned subsidiary of ALI under the Ayala Malls brand, which will pay a monthly guaranteed building lease for a period of 36 years, thus ensuring stable income to AREIT.

The Evotech buildings in Nuvali, on the other hand, have a combined leasable space of 23,000 square meters. The buildings are 100-percent occupied and leased to Concentrix CVG Philippines and IBM Business Services.

Bacolod Capitol has 11,000 square meters of leasable space, while Ayala Northpoint Technohub has 5,000 square meters. Furthermore, the office condominium units in the BPI-Philam Life Buildings in Makati and Alabang have a total of 1,500 square meters.

Following this latest transaction, ALI will own about 66 percent of AREIT. INQ