AREIT asset value to reach P52-B with new infusion


AREIT, Inc., the real estate trust sponsored by Ayala Land Inc., announced that its planned share for property swap with ALI will increase its deposited property value to P52 billion.

The firm disclosed to the Philippine Stock Exchange that its Board of Directors has approved the increase of AREIT’s authorized capital stock from P11.74 billion to P29.5 billion.

From the increase, ALI will subscribe to 483.25 million primary common shares of AREIT in exchange for identified ALI commercial properties valued at P15.46 billion.

The transaction will be undertaken via a property-for-share swap at a price of P32.00 per share as validated by a third-party fairness opinion. 

“This asset infusion by ALI will increase AREIT’s leasing portfolio from 344,000 square meters to 549,000 sqm. and contribute further to its operating cashflows, resulting in higher dividends for its shareholders,” AREIT said.

The assets are primarily composed of office leasing properties located within Ayala Land’s prime estates in the country.

The details of the properties will be disclosed in the company’s 2021 Definitive Information Statement which shall be made available to shareholders on or before March 31.

The comprehensive corporate disclosure on the transaction will also be disclosed within five trading days from the said announcement in accordance with the Listing Rules of the PSE.

Subject to the shareholders’ approval, the firm said AREIT’s outstanding common shares will increase to 1.51 billion from 1.03 billion wherein ALI will own approximately 66 percent of the total shares “demonstrating its strong support as the Sponsor of AREIT while adhering to the prescribed minimum public ownership requirements under Philippine laws.

“We are excited to present this transaction to our shareholders as we deliver on our commitment to expand further and create more value,” said Carol T. Mills, AREIT President and CEO.

Notwithstanding ALI’s increased ownership, AREIT’s dividend per share is projected to grow with the addition of these new assets. At the exchange price of P32 per share, these assets to be infused are yield accretive to AREIT at 6 percent. 

“The priority of AREIT is to deliver to its investors a compelling yield that grows over time. This is derived from its stable recurring income with contracted escalations, as well as the addition of new assets in the portfolio. Through our Sponsor Ayala Land, AREIT is in a position to grow with ALI’s healthy pipeline of prime commercial properties nationwide,” Mills added.