AREIT gets SEC nod for swap deal with Ayala Land

Real estate investment trust pioneer AREIT Inc. has obtained approval from the Securities and Exchange Commission (SEC) to execute a property for share swap that will bulk up its portfolio value by P15.46 billion.

The deal with its sponsor, property giant Ayala Land Inc. (ALI), will enable the shareholders of AREIT to partake in the contributions from the new assets starting this fourth quarter of 2021.

In anticipation of the SEC’s approval, AREIT declared last Sept. 22 a third quarter dividend of 44 centavos per share for stockholders of record as of Oct. 6. This was declared much earlier to provide shareholders with an equitable share in the company’s performance for the whole third quarter, prior to the increase in its common shares in exchange for the new assets.

“The new assets are expected to contribute significantly to earnings in the succeeding periods, thereby increasing the potential dividend per share for AREIT shareholders,” the company said in a disclosure to the Philippine Stock Exchange on Monday.

With the transaction, AREIT’s gross leasable area has expanded to 549,000 square meters (sq m) from 344,000 sq m previously, while deposited property value rose to P52 billion from P37 billion.

10 more property assets

The enlarged portfolio now includes 10 more commercial property assets, including: Vertis North commercial development in Quezon City; One and Two Evotech in Nuvali Santa 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 and Madrigal Business Park in Alabang.

Vertis North alone has 125,000 sq m of leasable space and a retail podium of 39,000 sq m. The three office buildings in its complex are 97-percent occupied and leased to large business process outsourcing locators.

The Evotech buildings in Nuvali, all 100-percent occupied, have a combined leasable space of 23,000 sq m.

Bacolod Capitol has 11,000 sq m of leasable space while Ayala Northpoint Technohub has 5,000 sq m, both of which are 100-percent occupied.

Ayala Land and its subsidiaries Westview Commercial Ventures Corp. and Glensworth Development Inc. subscribed to about 483.25 million shares of AREIT in exchange for these properties. The recognition of income will accrue to AREIT beginning Oct. 1 this year.

Last March, AREIT’s board approved an increase in authorized capital stock to P29.5 billion from P11.74 billion and the subscription by ALI and its subsidiaries to 483.25 million primary common shares of AREIT in exchange for these commercial properties valued at P15.464 billion.

ALI will continue to own about 66 percent of AREIT’s total shares, in compliance with the 33-percent prescribed minimum public ownership requirement under Philippine laws. INQ