AREIT Inc., the real estate investment trust sponsored by Ayala Land Inc., reported that it has sold three condominium units to help fund the acquisition of a hotel owned by its parent company in Palawan.
In a disclosure to the Philippine Stock Exchange, AREIT said it sold three office condominium units at Ayala-Life FGU Center Alabang with an aggregate gross floor area of 339 square meters with net proceeds amounting to P42.69 million in cash installments.
The firm said proceeds from the sale of the three office condominium units will be used to acquire 100 percent of Seda Lio hotel in Palawan.
AREIT said in January that it is acquiring Seda Lio in El Nido, Palawan, from ALI's subsidiary Econorth Resort Ventures, Inc. for P1.19 billion cash.
Seda Lio is a 153-room resort hotel that caters primarily to leisure tourists, families, social and corporate events, and other visitors.
With the acquisition, AREIT will earn a guaranteed building lease from the hotel operator, Econorth Resort Ventures, over the next 25 years beginning January 2024.
“The acquisition of Seda Lio, alongside the planned asset infusions in 2024, will not only enlarge and expand AREIT’s footprint but also diversify its assets and reduce concentration risk,” said AREIT President and CEO Carol T. Mills.
She added that, “Altogether, this will grow AREIT’s Assets under Management from P87 billion to P117 billion, quadruple the company’s size when it first listed in August 2020.”
This transaction is part of AREIT’s 2024 growth plans, which includes infusions from its Sponsor, Ayala Land, Inc. (ALI), of its flagship buildings in the Makati CBD, Ayala Triangle Gardens Tower 2 – ALI’s most premium headquarter-office located at the corner of Paseo de Roxas and Makati Avenue, luxury mall Greenbelt wings 3 and 5 and Holiday Inn and Suites at Ayala Center, Makati, and Seda Hotel at Ayala Center Cebu, worth P21.8 billion.
Complementing the ALI infusions is the acquisition of a 276-hectare industrial land in Zambales leased by Giga Ace 8, Inc. from Buendia Christiana Holdings Corp. (BCHC), wholly-owned subsidiaries of ACEN.
Except for Seda Lio, the other assets will be acquired through a property-for-share swap with ALI and its subsidiaries, Greenhaven Property Ventures, Inc. and Cebu Insular Hotel Co., Inc., subscribing to 642.15 million and BCHC to 199.11 million AREIT primary common shares at an exchange price of P34.00 per share, as validated by a third-party fairness opinion.