THE Securities and Exchange Commission issued on July 10, 2020 its pre-effective approval of AREIT Inc.’s registration for a Real Estate Investment Trust (Reit) Initial Public Offering (IPO)with an offer of up to P15 billion.
The base offer is up to 456,883,000 common shares at an offer price of up to P30.05 per share, with a stabilization option of up to 45,688,700 common shares. In total, this represents up to 49 percent of AREIT’s capital stock.
Ten percent of the proceeds from the offer shares will be used by AREIT to fund the acquisition of the fourth commercial leasing asset in its portfolio, Teleperformance Tower, a Grade-A, Peza-accredited business process management (BPM) development located in Cebu IT Park.
A Reit is a company that owns, and in most cases operates, income-producing real estate. AREIT is a subsidiary of Ayala Land Inc. (ALI).
Meanwhile, 90 percent of the proceeds will be used by ALI for reinvestment into its real estate projects in the Philippines, within one-year from the receipt of proceeds, pursuant to the revised implementing rules and regulations of the Philippine Reit Act of 2009.
AREIT’s portfolio consists of investment grade commercial assets in very prime business locations in Makati City. All properties are occupied by diverse high-quality tenants consisting of large BPM companies, top multinationals and local headquarter offices, together with amenity retail, food and essential stores.
Properties
Its first property, Solaris One, is located along dela Rosa St., and is one of the pioneer BPM buildings in the country which continues to command prime rental rates and healthy tenancy to this day. The second property at the northern end of Ayala Avenue is Ayala North Exchange—a mixed-use commercial development, completed in 2019, with two office towers, a retail podium and Seda Residences Makati, a serviced apartment covered by a long-term lease with a subsidiary of ALI.
The third building, which AREIT leases from ALI, is McKinley Exchange Corporate Center located at the very prominent corner of Edsa and McKinley Road. Together with the acquisition of Teleperformance Cebu post-listing, AREIT will have a total gross leasable area of over 170,000 square meters, providing its investors with stable cash flows and opportunities for growth.
With the SEC pre-effective approval, AREIT is closer to launching the country’s maiden Reit.
It shall be securing approval from the Philippine Stock Exchange of its listing application, and its order of registration and permit to sell from the SEC. (PR)