Property developer Megaworld Corp. said it is infusing its four Grade A properties in Iloilo Business Park and Mckinley Hill in Taguig into its real estate investment trust (REIT) unit by next month.
The company said Mreit Inc. will acquire Two Techno Place, Three Techno Place and One Global Center, which are located in Iloilo Business Park; as well as World Finance Plaza in McKinley Hill in Fort Bonifacio, Taguig.
The four prime office properties have a combined gross leasable area (GLA) of 55,700 square meters and have an average occupancy rate of 99 percent. The company will acquire these properties through new borrowings to further enhance returns as Mreit currently has no bank debt on its balance sheet.
Once completed, the infusion will increase Mreit’s portfolio by a quarter to 280,131 square meters from 224,431 square meters.
“We remain steadfast in our vision of making Mreit one of the largest office REITs not only in the Philippines, but in the Southeast Asian region as well, and this acquisition is but the first step to realizing the significant growth potential of the company. We look to close the deal by December of this year and expect that these assets will start to contribute revenues to Mreit starting January 2022,” Mreit President and CEO Kevin Andrew L. Tan said.
The company earlier said it will infuse around 100,000 square meters of additional office GLA equivalent to about 45 percent of the company’s total portfolio, before the end of 2022. This transaction represents the first wave of acquisitions to meet this target.
Even during the pandemic, demand for office space in Iloilo Business Park and McKinley Hill remained high, particularly from business process outsourcing locators.
“The quality of growth is also important to us. That is why we are very deliberate in choosing which properties to acquire. This way, we not only ensure the sustainability of our income generation, but also provide a clear path towards capital appreciation,” Tan said.
Last week, the company reported that its income in January to September grew 6 percent to P8.6 billion from last year’s P8.1 billion.
It said consolidated revenues for the period rose 10 percent to P36.9 billion from last year’s P33.4 billion.
For the quarter ending September, the company said its income rose 46 percent to P3.3 billion from P2.2 billion last year.
Consolidated revenues during the quarter rose by half to P14.5 billion from last year’s P9.6 billion, the company said.
Real estate sales doubled during the quarter to P9.6 billion from last year’s P4.7 billion, mainly due to the expansion in construction activities.