MREIT plans to grow office footprint to 1M square meters
Real estate investment trust MREIT Inc. sees its leasable portfolio hitting half a million square meters—equivalent to the combined area of 70 football fields —by 2024, in line with its pitch to be the largest office-oriented REIT in Southeast Asia.
Within the next five to 10 years, the portfolio is targeted to breach the 1 million square meter (sq m) mark, which could make the Megaworld Corp.-sponsored company the fastest-growing REIT in the country.
“Our goal is to put the Philippines and MREIT on the global REIT map because of the size and quality of our REIT portfolio and our world-class tenant base. We believe we can easily achieve this because Megaworld already has 1.2 million sq m of existing office buildings and has a robust pipeline of new office development spread across 26 business parks across the country,” Kevin Tan, president and chief executive officer of MREIT, said in a statement on Monday.
Next year, Megaworld, which pioneered cyberpark developments to become a leading office landlord in the country, plans to inject additional 100,000 sq m of prime office assets to increase MREIT’s portfolio to around 324,000 sq m.
MREIT recently priced its initial public offering (IPO) at P16.10 per share, bringing to public hands as much as P15.3 billion worth of shares. At this IPO price, it is expected to deliver a dividend yield of at least 5.65 percent for 2022 and 6.1 percent for 2023.
“We remain bullish about the prospects of the Philippine BPO sector and Megaworld expects to maintain its undisputed leadership position as the Philippine office landlord of choice for the world’s leading IT and BPO companies,” Tan said.
‘Grade A assets’
With the infusion of additional assets, MREIT’s dividend yield is seen to increase further.
MREITs initial portfolio of 224,431 sq m consists of 10 prime office buildings in three of Megaworld’s most established township locations. These include 1800 Eastwood Avenue, 1880 East Avenue, E-commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley Building, 18/20 Upper McKinley Building, One Techno Place Iloilo, Richmonde Tower and Richmonde Hotel Iloilo.
The current portfolio includes only grade A Philippine Economic Zone Authority-accredited buildings with mostly business process outsourcing and multinational tenants.
“MREIT’s strategy is to be very focused on high-quality office buildings with high-quality tenants that are located inside an already established township. Throughout the years, our integrated live-work-play townships has proven to be successful in attracting better and stickier tenants, which in turn translates to significantly less tenant churn, consistently higher occupancy rates and sustainable escalating rental rates,” Tan explained.
MREIT’s offering had been priced at an attractive level—its final price slashed by 27 percent from the earlier stated maximum price “to provide IPO investors a compelling entry opportunity to become long term partners in MREIT’s goal of becoming the Philippines’ fastest growing REIT backed by the country’s largest office landlord,” said Eduardo Francisco, president of BDO Capital, one of the joint global coordinators for the IPO. INQ
