The Securities and Exchange Commission (SEC) has approved the acquisition by MREIT Inc., the real estate investment trust of township developer Megaworld Corporation, of six prime PEZA-accredited office properties worth P13.15 billion.
In a disclosure to the Philippine Stock Exchange (PSE), MREIT said this acquisition will expand its portfolio by 156,631 square meters, increasing its total gross leasable area by 48 percent to 482,055 sqm.
The properties included in the acquisition are Two West Campus, Ten West Campus, and One Le Grand in McKinley West; One Fintech and Two Fintech in Iloilo Business Park; and Davao Finance Center in Davao Park District.
In exchange, MREIT will issue 926.16 million primary shares at P14.20 per share, based on independent appraisals and third-party fairness opinion duly approved by the company’s RPT Committee and Board of Directors.
The Fairness Opinion was undertaken by FTI Consulting Philippines Inc. The Valuation Report on the Properties was prepared by the third party and independent appraiser and property valuer, Santos Knight Frank Inc. on the basis of the Income Approach in compliance with International Valuation Standards.
The transaction shall result in an increase of control and ownership of Megaworld in MREIT from 51.33 percent to 63.44 percent.
“This acquisition is a major milestone in our mission to drive MREIT's growth and solidify its position as one of the leading REITs in the Philippines,” said MREIT President and CEO Kevin L. Tan.
He added that, “these high-quality, income-generating assets will start contributing to MREIT’s income by the fourth quarter of this year, further enhancing value for our shareholders and ensuring sustained growth in dividends.”
The acquisition will expand MREIT’s portfolio to 24 prime office properties strategically located in five Megaworld premier townships: Eastwood City, McKinley Hill, McKinley West, Iloilo Business Park, and now, Davao Park District.
This reinforces MREIT’s strategy of acquiring prime assets in key growth areas that offer stability and long-term value to the company.
The expanded portfolio will enable MREIT to further leverage its position in the office leasing market, while providing shareholders with enhanced returns through diversified, high-quality assets.
The transaction is pursuant to MREIT’s investment plan to infuse assets to reach 500,000 square meters of GLA before the end of 2024.
The transaction represents the third wave of acquisitions in accordance with the investment plan, geared towards realizing the vision of making MREIT the largest office REIT in Southeast Asia.