AREIT lists at PSE, get triple-A credit rating

Published August 13, 2020, 4:40 PM

by James A. Loyola

AREIT Inc., the country’s first real estate investment trust, has listed its shares at the Philippine Stock Exchangejust as it received a triple A credit rating.

 Sponsored by property giant Ayala Land Inc., recently completed its P12.34 billion initial public offering with shares two times oversubscribed.

 AREIT sold 456.88 million common shares (Firm Offer) at a price of P27.00 per share. The IPO consisted of 47.86 million primary common shares and 409.02 million existing common shares offered by ALI, with an over-allotment option of up to 45.69 million shares.

 AREIT shares closed at P24.90 per share, lower by 7.78 percent or P2.10 per share.

“I am honored to mark another milestone for the Ayala Group with the launch of this very first Real Estate Investment Trust in the country.We know that this comes at an extremely challenging period for all of us with the Covid-19 pandemic affecting many businesses, including ours,” said ALI Chairman Fernando Zobel de Ayala.

He noted though that, “through the Ayala Land REIT, we hope to support the economy and provide some much-needed stimulus to mitigate the impact of this pandemic.”

Finance Secretary Carlos Dominguez said AREIT’s listing will encourage more property developers to put up REITs that would “provide attractive and dependable investment opportunities for the average Filipino.”

Philippine Rating Services Corporation (PhilRatings) assigned its highest Issuer Credit Rating of PRS Aaa (corp.), with a Stable Outlook, to AREIT as an opinion on the general and overall creditworthiness of the company.

A company rated PRS Aaa (corp.) has a very strong capacity to meet its financial commitments relative to that of other Philippine corporates.

The rating and Outlook were assigned given that the firm is the pioneering REIT in the Philippines with Grade A, Philippine Economic Zone Authority (PEZA) accredited investment properties and high-quality tenant base.

It also has an experienced and professional management coupled with solid support from the Sponsor, ALI, and strong synergy within the Ayala Group and a growing portfolio of investment properties with resilient recurring income and high margins, even amidst the challenges brought about by the COVID-19 pandemic and the mandatory community quarantine. The rating also took into consideration the increasing economic and market uncertainty caused by the COVID-19 pandemic, as well as pending regulations which may reduce the Company’s fiscal incentives.

 
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