MREIT Inc. is set to expand its property portfolio by 48 percent after receiving the go signal from the Securities and Exchange Commission to acquire six prime offices, valued at P13.15 billion, from parent company Megaworld Corp.
The real estate investment trust (REIT) company will issue 926.16 million shares to Megaworld in exchange for the properties, all of which are accredited under the Philippine Economic Zone Authority.
The properties acquired were Two West Campus, Ten West Campus and One Le Grand in McKinley West; One Fintech and Two Fintech in Iloilo Business Park; and Davao Finance Center in Davao Park District.
“This acquisition is a major milestone in our mission to drive MREIT’s growth and solidify its position as one of the leading REITs in the Philippines,” MREIT president and CEO Kevin Tan said.
Following the transaction, Megaworld’s ownership in MREIT will increase to 63.44 percent from 51.33 percent.
The property-for-share swap transaction will grow MREIT’s portfolio to 482,055 square meters (sq m) of gross leasable area (GLA). These comprise 24 prime office properties across five Megaworld townships in Metro Manila, Iloilo and Davao.
This puts MREIT closer to its goal of reaching 500,000 sq m of GLA by the end of this year.
“These high-quality, income-generating assets will start contributing to MREIT’s income by the fourth quarter of this year, further enhancing value for our shareholders and ensuring sustained growth in dividends,” Tan added.
In the first half, MREIT saw its total revenues improve by 1.8 percent to P2.1 billion on higher collection of rental income. Net income for the period, however, was nearly flat at P1.47 billion.