Ayala Land’s pioneering real estate investment trust (REIT) in the Philippines, AREIT Inc. (AREIT), reported a 29 percent growth in net income to P1.31 billion in the first half of the year.
In a disclosure to the Philippine Stock Exchange, the firm explained that its earnings include the fair value recognition of its properties.
To reflect the market value of its properties and align financial reporting practices with that of global REITs, AREIT changed the accounting method it uses in valuing investment properties, from cost method to fair value method.
Factoring out unrealized gains in the fair value recognition of its properties, AREIT’s net income reached P1.01 billion, 55 percent higher than in the first half of last year.
AREIT said the higher profit reflects the company’s growth in earnings from its new properties and the stability of its existing buildings.
The firm posted revenues of P1.36 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of P1.05 billion for the first half of 2021, a 49 percent and 39 percent growth, respectively, versus last year.
This is a result of the positive contribution of new properties, The 30th in Pasig, and land parcels in Laguna Technopark it acquired last January 2021, Teleperformance Cebu in October 2020, and rental escalations of existing leases. It sustained a high occupancy rate of 99 percent.
“As we complete our first full year of operations as a REIT since August 13, 2020, we have delivered consistently on our targets and positioned the company for growth with the addition of new assets,” said ARET President and CEO Carol T. Mills.
She added that, “We instituted measures to assure our locators and customers of the safety of our properties and personnel amidst the pandemic. The company continues to ensure high standards of Environmental, Social and Governance practices for all stakeholders.”
AREIT secured Safety Seal certifications for its Metro Manila properties: Ayala North Exchange, Solaris One, McKinley Exchange Corporate Center, and The 30th Corporate Center, from the Department of Interior and Local Government through the respective local government units.
The certification recognizes and verifies the safety initiatives implemented in response to the global health crisis, and in compliance with recent public health standards set by the government.