THE real estate investment trust (REIT) of property developer Ayala Land, Inc. (ALI) secured the approval of the Securities and Exchange Commission (SEC) for its property-for-share swap worth P11.26 billion.

In a disclosure to the Philippine Stock Exchange, AREIT, Inc. said that the SEC approved ALI’s subscription to around 252.14 million shares in the REIT in exchange for ALI-owned Cebu commercial properties.

The transaction price is at P44.65 per share, which brought the projected yield of the assets to be infused to 6%.

“The swap will further increase AREIT’s portfolio from 549,000 square meters (sq.m.) to 673,000 sq.m. of gross leasable area [and] increase AREIT’s assets under management from P53 billion to P64 billion,” said AREIT.

“The new assets are expected to contribute to earnings of the company in the succeeding periods,” the company added.

The assets involved are: 20,842-sq.m. eBloc 1; 27,727-sq.m. eBloc 2; 15,233-sq.m. eBloc 3; 16,167-sq.m. eBloc 4; 27,517-sq.m. ACC Tower; and 16,813-sq.m. Tech Tower 1, all located in Cebu IT Park.

In line with the approval of the SEC, AREIT and ALI have amended the deed of exchange the parties signed in recognition of the income from the new assets of AREIT in the fourth quarter of 2022.

“AREIT will apply for the Bureau of Internal Revenue Certificate Authorizing Registration for the new assets and listing the shares in favor of ALI within the first quarter of 2023,” the company said.

Once realized, this will increase AREIT’s outstanding common shares to 1.76 billion from 1.51 billion, with ALI owning 66% of the total shares.

ALI is the sponsor of AREIT, which owns 60.32% direct and indirect shares of AREIT.

On Wednesday, ALI’s shares climbed by 50 centavos or 1.56% to P32.45 apiece, while shares in AREIT slipped by 10 centavos or 0.28% to P5.60 each. — Justine Irish D. Tabile