RL Commercial REIT, Inc. (RCR) obtained the Philippine Stock Exchange Inc. (PSE) board approval for the listing of its real estate investment trust initial public offering (REIT IPO) of up to PHP 26.7 billion (~USD 534M1). Upon its target listing, RCR is poised to be the largest REIT by portfolio valuation and asset size, longest in land lease tenure, and most geographically diversified office REIT in the country.
The PSE board cleared RCR’s proposed offering of up to 3.34 billion common shares at a maximum offer price of PHP 7.31 per share, with an over-allotment option of up to 305 million common shares. At the maximum offer price, RCR will have the largest market capitalization.
Based on the latest timetable, RCR’s offer period will run from August 25 to September 3, 2021, with target listing date on September 14, 2021. The offer shares will be traded on the PSE main board under the trading symbol “RCR”.
RCR is backed by its sponsor, Robinsons Land Corporation (RLC), one of the leading real estate and property developers in the country with a track record of 41 years in the industry. The full backing of the sponsor was further demonstrated by RLC extending land leases of as long as 99 years to RCR. As having the longest land lease tenure among Philippine REITs to date, this provides long term sustainability and predictability to RCR.
The company’s initial portfolio consists of 14 commercial real estate assets located in Central Business Districts across Metro Manila such as in Makati, BGC and Ortigas, Quezon City and Mandaluyong and in the key cities of Naga, Tarlac, Cebu, and Davao, making it the most geographically diverse Philippine REIT. with a total gross leasable area (GLA) of 425,315 sqm. The portfolio has a committed occupancy rate of 99%. Santos Knight Frank’s appraisal value of the assets is Php 73.9B as of 30 June 2021.
Potential additions to RCR’s portfolio in the future are RLC’s Cyberscape Gamma in Ortigas and/or Robinsons Cybergate Center 1 in Mandaluyong, subject of the recent Memorandum of Understanding (MOU) entered by RCR and RLC, according to the latest REIT Plan available in the RCR website. Including the Cyberscape Gamma and the Robinsons Cybergate Center 1, RLC has approximately 204,000sqm GLA in existing office assets, 68,000sqm GLA of business process outsourcing (BPO) spaces located within RLC’s various commercial centers as well as 150,000sqm GLA of properties that are in various stages of construction. Overall, RLC’s potential pipeline for infusions to RCR amounts to a total GLA of approximately 422,000 sqm over time. All Any potential infusions are subject to the fund manager’s recommendations, market conditions, the requirements of RCR’s business and the approval of the relevant regulatory bodies.
The office tenants of RCR properties are primarily engaged in essential services like information technology and business process management (IT-BPM). The BPO industry is the core of RCR’s tenant base.
“The principal strategy of RLC REIT is to invest on a long-term basis in a diversified portfolio of income-producing commercial real estate assets, leased primarily for office purposes and strategically located in major CBDs and key cities and urban areas across the Philippines,” the company stated in the REIT Plan.
RCR has engaged BPI Capital Corporation (BPI Capital) and UBS AG Singapore Branch (UBS) as the Joint Global Coordinators, Lead Managers, and Joint Bookrunners for the offering. BPI Capital was also tapped as the Lead Local Underwriter while UBS will act as the Lead International Bookrunner.
China Bank Capital Corporation, First Metro Investment Corporation, and PNB Capital and Investment Corporation will serve as the Local Underwriters while SB Capital Investment Corporation will serve as the Participating Underwriter. Meanwhile, CLSA Limited and Merrill Lynch (Singapore) Pte. Ltd. are the International Bookrunners.
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