Ayala Land leads way with first REIT offering

Known for its pioneering ways, Ayala Land Inc. is all set to launch the first real estate investment trust (REIT) in the Philippines.

AREIT Inc. — the REIT sponsored by the property arm of the country’s oldest conglomerate, Ayala Corp. — has received the green light from the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) for its initial public offering.

The company will offer up to 47,864,000 new common shares and up to 409,019,000 existing common shares, with an over-allotment option of up to 45,688,700 secondary shares, at a maximum offer price of P30.05 per piece for a total of P15.1 billion.

 The maiden share sale will run from July 27 to 31 in time for the listing of and the commencement of trading in the company’s shares on the PSE on Aug. 7.

 AREIT targets to raise as much as P1.332 billion in net proceeds from the primary offer for the expansion of its building portfolio through the acquisition of a fourth building, Teleperformance Cebu.

Ayala North Exchange, among the AREIT’s properties, is a flagship mixed-use development within the Makati Central Business District featuring offices, retail amenities and a serviced apartment.

 At present, AREIT’s property portfolio consists of three commercial buildings namely Solaris One, Ayala North Exchange and McKinley Exchange via lease from the sponsor.

 Ayala Land, meanwhile, could net about P13.309 billion from the secondary offer, assuming full exercise of the overallotment option. The proceeds will be reinvested in real estate projects in the Philippines within a year.

 Assuming full exercise of the overallotment option, the public offering will allow the public to own 49 percent of the issued and outstanding common shares of AREIT.

 Ayala Land will retain a 41.61 percent shareholding in AREIT, while its subsidiary AyalaLand Offices Inc. will own the remaining 9.39 percent upon completion of the public offering.