MREIT, Megaworld in P 5.2-B share-for-property swap

MREIT, the listed real estate investment trust (REIT) arm of billionaire Andrew Tan’s Megaworld Corp., announced a P5.27 billion deal to acquire four more office buildings as it builds up its portfolio following its public offering last year.

The offices, located in Megaworld’s township projects in Iloilo City and Taguig City in Metro Manila, would increase MREIT’s total leasable space by 16 percent to 325,000 square meters, the company said in a statement over the weekend.

The projects are the Festive Walk 1B and Two Global Center in Iloilo Business Park and One West Campus and Five West Campus in McKinley West, Taguig City.

MREIT said these were “grade A” offices in Philippine Economic Zone Authority (Peza)-accredited zones.

“Our objective is to accelerate our growth plans and double MREIT’s portfolio by the end of this year while ensuring that our acquisitions will be accretive to our shareholders. We aim to deliver an attractive total return to MREIT investors,” said MREIT president and CEO Kevin Tan.

Payment in shares

MREIT is paying for the properties through the issuance of 263.7 million shares at P20 each. The company’s share price shed 1.60 percent to P18.40 each on Friday.

Despite the impact of the pandemic on on-site office work, MREIT said the buildings to be acquired maintained an above-industry average occupancy rate of 96 percent.

Moreover, the assets offered a combined investment return of 5.7 percent, which MREIT said was higher than its forecast dividend yield.

Tan pointed out that Mckinley West was one of the group’s fastest growing townships in Metro Manila.

“This township location also commands one of the highest rental rates in the Greater Manila Area because of the high demand for office spaces in this area,” he said.

MREIT earlier announced plans for a P20 billion asset acquisition plan for 2022.

Other acquisitions

The current deal comes on top of MREIT acquisition of four grade-A and Peza-accredited offices last December.

Once the new acquisitions are completed, MREIT’s portfolio will cover 18 office properties in four Megaworld township projects.

These were 1800 Eastwood Avenue, 1880 Eastwood Avenue and E-Commerce Plaza in Eastwood City; One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley and World Finance Plaza in McKinley Hill; One Techno Place, Two Techno Place, Three Techno Place, One Global Center, Two Global Center, Festive Walk 1B, and Richmonde Tower in Iloilo Business Park; and One West Campus and Five West Campus in McKinley West. INQ