MREIT Inc., the real estate investment trust sponsored by Megaworld Corporation, has set the final price for its initial public offering at P16.10 per share for a maximum offer size of P15.3 billion.
In a disclosure to the Philippine Stock Exchange, the firm said it has also set the final number of its offer shares at 844.3 million firm shares and 105.54 million shares for the overallotment option.
Initially, Megaworld had planned to offer as much as 1.08 billion MREIT shares priced at up to P22.00 per share, with an overallotment option of up to 161.7 million common shares.
“The Company has decided to price the deal at an attractive level to provide more upside to IPO investors who will be its long-term partners in this new journey,” said MREIT President Kevin L. Tan.
He added that, “At this IPO price, MREIT will be offering investors an attractive dividend yield of 5.65 percent, to be distributed quarterly, and at the same time, we will be giving them exposure to a high quality, fast-growing portfolio of assets.”
Immediately post IPO, Tan said Megaworld will be retaining a 62.5 percent stake “to capture more near term and long term valuation upsides for its shareholders as MREIT actively grows its portfolio with the maturation of the overall REIT industry in the Philippines.”
MREIT expects both its market cap and float to grow over time as it successfully executes on its aggressive growth trajectory. It is being structured to deliver fast growth and strong aftermarket performance.
“At the current issue size, the institutional tranche was close to two times oversubscribed, which bodes well for aftermarket performance,” said Tan noting that, “If we exercised full option, it would have still be oversubscribed 1.5 times.”
Megaworld will be receiving more proceeds once it completes the impending cash injection of three buildings into MREIT, which is slated to be completed by early 2022.
The resulting total proceeds will be used by Megaworld to fund its 21 projects all over the country during the next 12 months.
MREIT’s initial portfolio covers an aggregate GLA of 224,430.8 sq.m. across 10 properties, with an aggregate appraised value of about P49.32 billion.
Its properties are spread out across Metro Manila, primarily in Taguig City and Quezon City, as well as in Iloilo City.