Megaworld, MREIT to complete P5.3-B asset infusion of offices

MANILA, Philippines  -Billionaire Andrew Tan’s Megaworld Corp. is set to complete a P5.3-billion asset infusion of Grade A offices into real estate investment trust (REIT) arm MREIT Inc., boosting the latter’s asset base and earnings.

MREIT said in a stock exchange filing the transaction, announced nearly a year ago, will proceed after the Securities and Exchange Commission confirmed the premium valuation of the properties.

The office building are projects within Megaworld’s townships in Iloilo City and Taguig City in Metro Manila.

These were 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 it will start recognizing income from the properties “from the start of the first quarter of 2023.”

The four properties have a combined gross leasable area (GLA) of 44,567 square meters. These will increase MREIT’s total leasable area by 16 percent to 324,742 sqm.

There were no details on the current occupancy rates of the projects but Megaworld said in a statement last year these had an average occupancy of 96 percent.

“The transaction is pursuant to MREIT’s investment plan to infuse around 100,000 square meters of additional office GLA before the end of 2022,” MREIT said in a stock exchange filing last week.

To be the largest

“The transaction represents the second wave of acquisitions in accordance with the investment plan, geared towards realizing the vision of making MREIT the largest office REIT in the Southeast Asian region,” it added.

Under the deal, Megworld will acquire 263.7 million shares of MREIT or P20 per share, a premium over MREIT’s current share price. MREIT shares closed at P13.98 each a day before the SEC confirmed the valuation.

In a previous statement, MREIT president and CEO Kevin Tan said the assets would increase MREIT’s property value by 9 percent to P64.5-billion as he pledged to deliver competitive returns to shareholders.

MREIT will have 18 office properties in four Megaworld townships. These are 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, One West Campus and Five West Campus in McKinley West. INQ

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