Megaworld, MREIT extend due diligence for asset sale
Megaworld Corporation and its real estate investment trust MREIT Inc. have agreed to move back their planned asset-for-share swap to May 31, 2024 from the original target of sometime in the third quarter of 2023.
In a disclosure to the Philippine Stock Exchange (PSE), MREIT said this is regarding the Memorandum of Understanding it executed with Megaworld for the potential acquisition of seven grade A office assets located in McKinley, Iloilo and Davao.
“By mutual agreement of the Parties, and in accordance with Paragraphs B and F of the MOU, the conduct of the Company’s financial, legal, and technical due diligence and the execution of the Definitive Agreements is mutually extended,” MREIT said.
It added that, “the Parties agree that the effectivity of the Definitive Agreement/s duly executed by the Parties for the transfer of the Income-generating Assets shall commence only upon fulfillment of all Conditions Precedent identified under Paragraph G of the MOU.”
MREIT said earlier that the targeted assets of Megaworld have a total gross leasable area of around 150,500 square meters and will boost its annual revenues by P1.2 billion.
These potential additions include: Two West Campus (9,500 sqm) and Ten West Campus (36,400 sqm) in McKinley Hill; Science Hub Tower 3 (20,500 sqm) and Science Hub Tower 4 (20,700 sqm) in McKinley West; One Fintech Place (18,200 sqm) and Two Fintech Place (18,100 sqm) in Iloilo Business Park; and Davao Finance Center (27,100 sqm) in Davao Park District.
“These properties boast high average occupancy rate of 94 percent and quality tenants, marking a significant step towards our commitment to deliver sustained growth and value to our investors,” said MREIT President and CEO Kevin L. Tan last June.
When the new properties being eyed by MREIT is concluded, the company’s portfolio will grow to around 475,500 sqm, higher by 46 percent compared to the current 325,000 sqm and will bring MREIT closer to its target of 500,000 sqm of assets under management by end-2024.
Since its initial public offering in 2021, the company has already injected eight office buildings into its portfolio and grew its value by 25 percent to P62 billion, following the two sets of previous acquisitions.
To date, MREIT’s portfolio covers 18 office properties in four Megaworld premier townships: Eastwood City, McKinley Hill, Iloilo Business Park, and McKinley West.