Ayala Land Inc.’s (ALI) holdings in its real estate investment trust (REIT) AREIT Inc. will increase to 66 percent after a property-for-share swap deal, which will see the infusion of development, such as the Vertis North, into the REIT firm.
In its disclosure, AREIT said Ayala Land’s holdings in the company will increase to 66 percent, which it said is a demonstration of its “strong support” for the REIT firm “while adhering to the prescribed minimum public ownership requirements under Philippine laws.”
At the moment, the combined ownership of Ayala Land and its unit Ayala Land Offices Inc. in the REIT is about 54.43 percent.
AREIT is increasing its authorized capital stock to P29.5 billion shares from the current P11.74 billion shares.
Ayala Land will subscribe to 483.25 billion of the primary common shares of AREIT in exchange for the identified commercial properties valued at P15.46 billion, or at a price of P32 per share.
If the transaction is approved by shareholders and regulators, AREIT’s outstanding common shares will increase to 1.5 billion common shares from 1.02 billion common shares.
Ayala Land is infusing some 205,000 square meters of leasable space, primarily composed of office leasing properties located within Ayala Land’s prime estates in the country, in AREIT.
These are Vertis North Commercial Development which has 3 office buildings and a retail podium located in Quezon City; One and Two Evotech in Nuvali Santa Rosa, Laguna; Bacolod Capitol Corporate Center and Ayala Northpoint Technohub, both located in Negros Occidental; and office condominium units at BPI-Philam Life buildings in Makati and Madrigal Business Park in Alabang. The largest of these properties is Vertis North commercial development with 125,000 sq.m. of leasable space and a retail podium of 39,000 sq.m.
The 3 office buildings are 97 percent occupied and are leased to large business process outsourcing locators including Google Services Philippines, Teleperformance, Telus and Global Payments. The retail component is operated by a wholly-owned subsidiary of Ayala Land under the Ayala Malls brand and will pay a monthly guaranteed building lease to AREIT for a period of 36 years.
The Evotech buildings in Nuvali in Laguna have a total of 23,000 sq.m. of leasable space. The buildings are 100 percent occupied and leased to Concentrix CVG Philippines and IBM Business Services. One Evotech is LEED silver certified.
The other properties are Bacolod Capitol Corporate Center with 11,000 sq.m. and Ayala Northpoint Technohub with 5,000 sq.m. both of which are occupied by ARB Call Facilities and Iqor, respectively.
Meanwhile, the BPI-Philam Life Buildings in Makati and in Alabang have a total of 1,500 sq.m., occupied and leased to Oberthur Card Systems in Makati and Amaia Land, an Ayala Land subsidiary headquartered in Alabang.
As a result, AREIT’s deposited property value will increase to P52 billion from P37 billion and its leasing portfolio will expand further to 549,000 sq.m. from 344,000 sq.m.
At an exchange price of P32 per share, the properties will generate a projected yield of 6 percent.
AREIT’s shares closed on Wednesday at P33 apiece.