Tycoon Andrew Tan’s township developer Megaworld Corporation has raised P500 million from the sale of shares in its real estate investment trust MREIT Inc.

In a disclosure to the Philippine Stock Exchange, Megaworld said it sold 40.65 million MREIT common shares under a block sale transaction at an offer price of P12.30 per share, a discount to the previous day’s closing price of P12.80 per share. MREIT closed at P12.84 per share today (April 18, 2024).

The shares sold are equivalent to a 1.45 percent stake in MREIT, thus reducing Megaworld’s interest in the company to about 55.13 percent from 56.58 percent while the public float has increased to 44.87 percent from 43.42 percent.

Megaworld said the proceeds from the block sale shall be settled on April 22, 2024 and assured that it will submit the required Reinvestment Plan detailing the use of proceeds from the block sale transaction.

BDO Securities acted as broker for the transaction.

Megaworld registered a 17 percent increase in consolidated revenues to P69.7 billion in 2023 from P59.5 billion the year before driven by the 16 percent growth in real estate sales, the sharp recovery in mall revenues by 54 percent and hotels by 46 percent, in addition to the 3 percent rise in rentals of offices.

Occupancy rates of Megaworld’s office spaces, malls, and Metro Manila hotels stood at 88 percent, 93 percent, and 67 percent, respectively. Reservation sales surged anew to P139 billion, boosted by project launches during the year amounting to P73 billion.

On the other hand, MREIT registered a 13 percent growth in attributable net income to P2.8 billion last year from the P2.5 billion earned in 2022.

The firm said its revenues rose by 14 percent year-on-year to P4.2 billion, fueled by the full-year contribution of the additional four Grade-A office towers from January 2023.

It added that, “Steady rental escalations among current tenants also supported revenue growth.”

The company ended the year with an occupancy rate of 96 percent, not only improving from the previous quarter but also significantly exceeding Metro Manila office industry’s average occupancy rate of around 81 percent to 82 percent, based on figures from property consultants.

“MREIT’s success in 2023 reflects the quality of our assets and our strong tenant relationships. Our approach to focusing on top-tier properties within Megaworld townships was crucial to our unparalleled success, allowing us to maintain elevated occupancy rates and keeping our growth momentum through the year,” said MREIT President and CEO Kevin L. Tan.

He added that, “As we look ahead, the focus on growth and quality will continue to be the pillars of our company. We are actively working on expanding our portfolio through the strategic asset acquisition announced last year, allowing MREIT to remain at the forefront of the industry in delivering sustained value to our stakeholders.”