AYALA Land, Inc. (ALI) has submitted an application to the Securities and Exchange Commission (SEC) for the country’s maiden real estate investment trust (REIT) offer.
ALI, through its subsidiary AREIT Inc., submitted on Friday its REIT Plan stating it wants to offer the public up to 478,639,700 shares at P30.05 each. This will raise up to P1.356 billion in net proceeds for the company.
The offer is composed of 47,864,000 new common shares and 430,775,700 existing common shares, with an over-allotment option of up to 23,932,000 shares.
“Through this initial capital market transaction, ALI hopes to pave the way for the development of a REIT market in the country, bringing another milestone to the Philippine stock market,” the company said in a statement.
It added it wants to do an initial public offering of AREIT once it secures regulatory approvals from the SEC and the Philippine Stock Exchange, Inc.
A copy of AREIT’s prospectus said its REIT plan covers three commercial buildings: the 24-storey Solaris One, the mixed-use development Ayala North Exchange, and the five-storey McKinley Exchange, all located in Makati City.
“The company seeded AREIT, Inc. with Grade A office assets located in Makati CBD (central business district) and is expected to expand its portfolio with new acquisitions in the future,” ALI said in its statement.
Proceeds from the offer will be disbursed by the end of 2020, as required by the REIT guidelines, and divided into P1.22 billion for future investments in real estate (90% of total) and P136 million for general corporate purposes (10%).
Specifically, ALI wants to acquire Teleperformance Cebu from its subsidiary ALO Prime Realty Corp., along with other real estate properties in Metro Manila and key regions.
The filing of AREIT’s prospectus to the SEC marks the first successful attempt by the regulator in more than 10 years to attract local property developers into REITs. This came after the government relaxed its regulations on the REIT law last month, specifically by reducing the minimum public float requirement to 33% and removing the 12% value-added tax on transferring properties to a REIT vehicle.
DoubleDragon Properties Corp. previously disclosed plans to raise about P11 billion annually in the next six years through the REIT listing of one-fourth of its completed leasable gross floor area.
Other firms that have expressed interest in REITs are Megaworld Corp., Robinsons Land Corp., SM Prime Holdings, Inc., and Century Properties Group, Inc. — Denise A. Valdez