Megaworld’s REIT diversifying into retail

MANILA, Philippines — MREIT Inc., the real estate investment trust (REIT) arm of billionaire Andrew Tan’s Megaworld Corp., is considering venturing into the retail space to capitalize on what is perceived to be a promising outlook for the sector.

“We are actually actively looking to diversify MREIT’s assets beyond the office sector. Starting this year, MREIT plans to inject retail assets [into our portfolio],” MREIT president and CEO Kevin Tan said during the company’s annual stockholders’ meeting held on Wednesday.

Tan said this will enable MREIT to maximize profitability from the strong rebound of in-tenant sales, rental rates, and occupancy rates at Megaworld Lifestyle Malls.

“This strategic move provides shareholders with exposure to the strong performance of the retail sector, enhancing the company’s overall resilience and growth prospects,” Tan said.

Diversified

Tan also said MREIT is studying other property types within the Megaworld portfolio to bring added value to the listed firm.

“By broadening our investment horizons into new asset types, this will ensure MREIT will have a balanced and diversified portfolio that can withstand various market dynamics,” he added.

The CEO said it is part of MREIT’s long-term goal of diversifying its property portfolio by 2030 through its sponsor Megaworld, “ensuring every sustainable growth and cementing our position as one of the market leaders.”

Recently, MREIT acquired P13.15 billion worth of office assets via share-for-asset swaps that span six office properties in the cities of Taguig, Iloilo, and Davao.

READ: MREIT seeks SEC nod on P13.15-billion binge

The transaction, which is still subject to the approval of the Securities and Exchange Commission, involves Two West Campus, Ten West Campus and One Le Grand at McKinley West; One Fintech and Two Fintech at Iloilo Business Park; and Davao Finance Center at Davao Park District.

These properties will be exchanged for 926.16 million of MREIT’s secondary shares at P14.20 apiece, representing a 10-percent premium over MREIT’s closing price of P12.94 per share on May 10.

Portfolio expansion

The company had said the acquisition would expand MREIT’s portfolio by about 157,000 square meters or 48 percent.

READ: Infusion of Megaworld malls to boost MREIT portfolio

“This positions us closer to our 2024 goal of reaching 500,000 square meters, as we are actively pursuing further acquisitions to achieve this target by year-end,” Tan said.

He said since the stock market debut, MREIT’s portfolio “more than doubled” in size to 482,000 sq m and by 52 percent in value to P75 billion.

“Our focus on strengthening tenant relationships to enhance customer service and tailored leasing solutions keeps us agile and responsive to market changes,” he said.

At present, MREIT has 18 office properties across four Megaworld townships in Quezon City, Taguig City and Iloilo City.