Top township developer Megaworld Corp. is subscribing to an initial ₱187.5 million in its real estate investment trust MREIT Inc., which is increasing its authorized capital by ₱3 billion in preparation for the next batch of its share-for-asset swap.

In a disclosure to the Philippine Stock Exchange, Megaworld announced that it has signed a Memorandum of Understanding with MREIT, which has submitted an application to the Securities and Exchange Commission to increase its authorized capital stock from ₱5 billion to ₱8 billion.

Pursuant to the Agreement, the firms agree to pursue a share swap arrangement over certain income-generating real estate of Megaworld that meets the investment criteria of MREIT.

MREIT intends to acquire the target growth assets to secure income growth and provide a competitive investment return to its shareholders.

In exchange for the assets or cash, Megaworld shall subscribe to primary common shares of MREIT at an average adjusted price per share equivalent to not less than ₱14.39 per share.

The share price carries a premium to the Volume Weighted Average Price (VWAP) of MREIT Shares for the period of 30 trading days prior to the transaction.

The firms will disclose details when agreed to and upon final determination of the valuation of the properties, the Swap Price, and compliance with the requirements of the SEC and PSE.

Out of the increase of ₱3 billion, and by way of compliance with statutory requirements, Megaworld initially subscribed to 25 percent, equivalent to ₱750 million or 750 million MREIT shares at par value of ₱1.00 per share.

For this subscription, it paid a cash amount of ₱187.5 million, representing the statutory payment of 25 percent of the 25 percent subscription.

MREIT plans to acquire mall and retail assets from Megaworld as part of its target to double its portfolio to one million square meters of gross leasable area (GLA) by 2027.

The firm stated that this move aims to capitalize on the continued growth in consumer spending and the strong momentum in mall leasing, complementing MREIT's established portfolio of high-occupancy office assets.

"Our goal is to diversify our portfolio and expand our revenue base. So while the country is experiencing an impressive growth in consumer activities, we want to tap into these opportunities,” said MREIT Chairman Kevin L. Tan.

He added that, “This will enable us to deliver both growth and diversification, keeping our portfolio resilient and relevant for the years ahead."

Megaworld, MREIT's sponsor, continues to hold a substantial portfolio of income-generating assets, including around 1 million sqm of office GLA and 500,000 sqm of retail GLA that may still be infused into MREIT over time.

This deep pipeline provides flexibility and underscores the long-term growth runway as MREIT accelerates toward its one million sqm target.

Across the country, foot traffic and sales in Megaworld Lifestyle Malls have already surpassed pre-pandemic levels, with strong leasing activities from both global and homegrown brands.

Mall occupancy has also reached a record 93 percent as of end-June 2025. This favorable environment underpins MREIT's strategy to bring in more retail assets in the future, ensuring that its portfolio captures both the growth of business process outsourcing and the resurgence of Philippine consumer spending.