AREIT Inc. (AREIT), the country’s first real estate investment trust, will enter a second property-for-share swap with its sponsor, Ayala Land Inc. (ALI). The transaction will involve six Cebu-based office buildings with an aggregate value of P11.2 billion in exchange for 252.2 million AREIT primary common shares, as validated by a third-party fairness opinion.
The six buildings are eBloc Towers 1 to 4 located at Cebu IT Park, ACC Tower and Tech Tower located at Ayala Center Cebu. The office buildings have a total gross leasable area (GLA) of 124,299 sqm with an overall occupancy rate of 97 percent, leased by major BPOs in the country.
The transaction is subject to the approval of AREIT shareholders at their annual meeting on April 21, 2022 and pertinent regulatory bodies. ALI and AREIT are targeting to complete the transaction within the year.
Since its IPO, AREIT delivered on its growth plans, resulting in 92 percent total shareholder return from dividend yield and price appreciation.
AREIT started with 153,000 sqm equivalent to P30 billion of Assets Under Management (AUM) in 2020. By December 2021, this has grown to 549,000 sqm, equivalent to P53 billion in AUM. With this new asset infusion, AREIT will grow further and reach 673,000 sqm or P64 billion in AUM in 2022 – a 213 percent increase since AREIT went public in 2020. This growth exceeds its target to double in size within two years from its IPO.
“We are focused on delivering our commitment to grow our assets, diversify our geographic and tenant base, and create more shareholder value with increasing dividends and price appreciation. With this new asset infusion, we foresee AREIT’s dividend per share to increase, in addition to the recently concluded asset infusions last year,” said AREIT president and CEO Carol Mills.
Last February, AREIT’s Board of Directors approved the declaration of dividends of P0.47 per share for the fourth quarter of 2021, to be distributed on March 25, 2022, to stockholders on record as of March 11, 2022. AREIT’s dividend per share increased to P0.47 in the fourth quarter from P0.44 in the third quarter after concluding its first asset-share swap of P15 billion last October 2021.
AREIT’s full-year dividends from its 2021 income totaled P1.77 per share, a 34 percent increase from 2020 and 12 percent higher than its REIT plan projection during the IPO. With this prospective infusion of Cebu assets, AREIT’s dividend per share is projected to increase further.