MREIT Inc., the real estate investment trust of Megaworld Corp., on Monday said it secured approval from the Securities and Exchange Commission (SEC) for the acquisition of four office properties in McKinley West and Iloilo Business Park with a total value of P5.3 billion.
The new acquisitions will have a total gross leasable area (GLA) of 44,567 square meters, which will increase the company’s asset portfolio by 16 percent to 325,000 square meters of GLA from the current portfolio of 280,000 square meters.
These properties were the Festive Walk 1B and Two Global Center in Iloilo Business Park, and One West Campus and Five West Campus in McKinley West in Taguig.
As of the end of last year, the four prime office properties have an occupancy rate of 96 percent, above the industry level of 81 percent.
“The SEC approval of our property-for-share acquisition results in the recognition of income from the new assets by Mreit from January 1, 2023, which will help drive our growth. The high occupancy rate of these buildings is a clear proof of the quality of our assets and their strategic locations. The new office assets from McKinley West now command one of the highest rental rates in the Greater Manila Area, supported by the high demand for office space in this area,” Kevin Andrew L. Tan, the company’s president and CEO, said.
The properties will be exchanged for 263.7 million primary common shares at P20 per share and represents a 41 percent premium over Mreit’s s price of P14.20 per share on March 24.
The properties to be infused are dividend accretive, meaning that the properties are expected to increase MREIT’s dividend payments to its shareholder.
“We’re committed to grow our portfolio size by 54 percent to 500,000 square meters by 2024. This will help us achieve our goal of delivering at least 10 percent annual total shareholder return as we are now looking forward to the next phase of Mreit’s growth,” Tan said.
The acquisition will expand the company’s portfolio to 18 office properties in four Megaworld premier townships.