MREIT, the soon-to-list Andrew Tan-led real estate investment trust (REIT) is planning to grow its office asset size to one million square meters with the goal of becoming the largest REIT in Southeast Asia.
The target is to achieve this within the next five to ten years as it aims to be the ‘country’s fastest growing REIT with the longest expansion pipeline’ amongst listed REITs on the Philippine Stock Exchange.
Toward this end, Megaworld is planning to infuse next year an additional 100,000 square meters of prime office assets to MREIT’s portfolio.
This, in turn, would increase MREIT’s asset size to around 324,000 square meters by end-2022.
MREIT president and CEO Kevin Tan said this would in turn reach roughly 500,000 sqm by 2024.
“We are committed to reaching half a million square meters by 2024, and are highly confident of our ability to reach one million square meters in the near future so that we can be the largest office REIT in Southeast Asia,” Tan said.
MREITs initial portfolio of approximately 224,431 square meters consists of 10 prime
office buildings in three of Megaworld’s most established township locations that are popular amongst the biggest BPO companies operating in the Philippines.
The company is targeting to list on the Philippine Stock Exchange on September 30.
He said the goal is to put the Philippines and MREIT on the global REIT map because of the size and quality of its REIT portfolio and tenant base.
“We believe we can easily achieve this because Megaworld already has 1.2 million square meters of existing office buildings and has a robust pipeline of new office development spread across 26 business parks across the country,” Tan said.
Moving forward, MREIT is bullish about the prospects of the Philippine BPO sector and Megaworld expects to maintain its undisputed leadership position as
the Philippine office landlord of choice for the world’s leading IT and BPO companies, Tan added.
MREIT’s initial portfolio includes 1800 Eastwood Avenue, 1880 East Avenue, E-commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley Building, 18/20 Upper McKinley Building, One Techno Place Iloilo, Richmonde Tower and Richmonde Hotel Iloilo.
“Our current portfolio has been carefully curated to include only Grade A PEZA-
accredited buildings with mainly BPO and multinational tenants. MREIT’s strategy is to be very focused on high quality office buildings with high quality tenants that are located inside an already established township.
MREIT’s initial public offering price was set at P16.10 per share, which translates to a projected 2022 dividend yield of 5.7 percent.
“This IPO was priced at an attractive level to provide IPO investors a compelling entry opportunity to become long term partners in MREIT’s goal of becoming the Philippines’ fastest growing REIT backed by the country’s largest office landlord. As a result, the institutional book building attracted strong interest from both long only foreign investors as well as domestic institutional investors,” said BDO Capital president Ed Francisco.
The estimated net IPO proceeds of P14.7 billion, together with the expected cash proceeds from the impending asset injection into MREIT by its sponsor, Megaworld, will be reinvested by Megaworld into 15 projects over the next 12 months.