Property giant Ayala Land Inc. reported to be raising about P2.7 billion from the sale of shares in its real estate investment trust AREIT Inc. in preparation for another asset injection.
According to Abacus Securities Corporation, “Ayala Land is unexpectedly placing out an additional 75 million AREIT shares to be priced at a discount of four percent to seven percent from (Thursday’s) close, or between P35.05 to P36.20 per share.”
“As we wrote previously, AREIT already had enough room to keep its float above the minimum with the impending issuance of 841.26 million shares,” the brokerage noted.
It added that, “our guess is that this is in preparation for another asset injection, possibly within the first quarter of 2025.”
In May this year, ALI and its wholly-owned subsidiary Westview Commercial Ventures Corp. have sold a combined P3.18 billion worth of AREIT shares through a placement agreement with BPI Capital Corporation and UBS AG Singapore Branch.
ALI said they sold a total of 98 million AREIT common shares at a transaction price of P32.45 per share. The placement is in relation to ALI’s property-for-share swap transaction with AREIT.
The divesting of some of its AREIT shares will allow ALI to infuse more assets into AREIT without breaching its minimum public ownership requirement.
Last January, ALI raised P5.63 billion from the sale of shares of real estate investment trust AREIT at P31.10 per share in preparation for its share for asset swap worth P23 billion.
ALI said that, together with its wholly-owned subsidiaries AyalaLand Offices, Inc. and Glensworth Development, Inc., it sold a total of 181 million AREIT shares at a transaction price of P31.10 per share.
The shares came from the property-for-share swap transaction with AREIT and proceeds from the transaction will be used according to ALI’s reinvestment plan as REIT sponsor of AREIT.
AREIT acquired P23 billion worth of prime commercial properties from ALI (ALI) alongside the purchase of the P6.77 billion industrial land from Buendia Christiana Holdings Corporation (BCHC), a wholly-owned subsidiary of ACEN Corporation (ACEN).
ALI’s new asset infusions into AREIT comprises Makati flagship assets, Ayala Triangle Gardens Tower 2 – ALI’s most premium office tower located at the corner of Paseo de Roxas and Makati Avenue, luxury mall Greenbelt 3 and 5 and Holiday Inn and Suites Makati at Ayala Center, as well as Seda Ayala Center Cebu.
ALI and its subsidiaries Greenhaven Property Ventures, Inc. and Cebu Insular Hotel Co., Inc. subscribed to 642.15 million AREIT primary common shares in exchange for the Makati and Cebu properties valued at P21.8 billion at an exchange price of P34.00 per share, as validated by a third-party fairness opinion.