Areit Inc., the real estate investment trust (REIT) of Ayala Corp., on Thursday said it will make its largest acquisition of prime commercial properties next year.
The company said it intends to acquire offices, shopping malls, and resorts from its sponsor, Ayala Land Inc. (ALI), worth some P23 billion.
Areit said it will also include in its portfolio a P6.77-billion industrial land from Buendia Christiana Holdings Corp. (BCHC), a wholly-owned subsidiary of ACEN Corp. This will make Areit the “most diversified REIT” in the country, according to the company.
The planned asset acquisition from Ayala Land involves its Makati flagship assets—Ayala Triangle Gardens Tower 2, the property developer’s premium office tower located at the corner of Paseo de Roxas and Makati Avenue and shopping malls Greenbelt 3 and 5; and Holiday Inn and Suites Makati at Ayala Center. It also includes Seda Ayala Center in Cebu.
“We believe in the synergistic goals between ALI as Sponsor and Areit. ALI has infused a total of P59 billion in assets into Areit since its IPO in 2020. The inclusion of Ayala Tower Two and Greenbelt 3 and 5—some of ALI’s prime assets in Makati, is a testament to our continued commitment to Areit’s long-term growth,” Ayala Land President and CEO and Areit Chairman Anna Ma. Margarita B. Dy said.
“We deliberately planned the acquisitions to have a healthy mix of malls, offices, hotels, and industrial properties, which broadens our portfolio and mitigates concentration risk to a particular sector,” Carol T. Mills, Areit president and CEO, said.
Ayala Land and its subsidiaries Greenhaven Property Ventures Inc. and Cebu Insular Hotel Co., Inc. will subscribe to 642.15 million Areit primary common shares in exchange for the Makati and Cebu properties valued at P21.8 billion at an exchange price of P34 per share, as validated by a third-party fairness opinion.
Areit’s shares closed at P29.30 apiece on Thursday.
The transaction will be subject to the approval of Areit’s shareholders in their special stockholders’ meeting in February 2024.
In addition to the asset-share swap, Areit will also acquire Seda Lio in El Nido, Palawan, from Ayala Land unit Econorth Resort Ventures Inc. for P1.19 billion. The acquisition is expected to immediately contribute to Areit’s income within the first quarter next year.
The acquisition from Buendia Christiana, meanwhile, involves its 276-hectare industrial land in Zambales, which will be leased by ACEN’s wholly-owned subsidiary, Giga Ace 8 Inc., for its solar plant operations.
It will provide Areit guaranteed rental income with annual escalations over the next 25 years.
These planned infusions will bring Areit’s assets under management to P117 billion, its gross leasable building area to more than 1 million square meters, and its leased industrial land area to 286 hectares by 2024.
The company said it will execute the deed of exchange with ALI, its subsidiaries, and BCHC and apply for its approval with the Securities and Exchange Commission (SEC) by March 2024. The new shares will be issued, and the income from the assets will accrue to AREIT upon approval. As in previous asset infusions, Areit will remain compliant with the minimum public float requirement as the sponsor will effect a block placement of its shares on or before the expected SEC approval within the second quarter of next year.