AYALA-LED real estate investment trust company AREIT, Inc. has secured approval from its board of directors for its multibillion property-for-share swap with Ayala Land, Inc. and its subsidiaries Ayala Land Malls, Inc. and North Beacon Commercial Corp.

In a disclosure to the stock market on Wednesday, AREIT said that about 607.56 million primary common shares would be given to Ayala Land in exchange for flagship offices and malls with an aggregate value of P22.48 billion.

“The rebound of commercial businesses is an opportunity for AREIT to widely diversify its assets with more retail buildings,” AREIT President and Chief Executive Officer Carol T. Mills said.

The agreement is subject to a third-party fairness opinion and the approval of AREIT shareholders at their annual meeting on April 26.

Under the deal, Ayala Land properties will be added to the portfolio of AREIT. These are One Ayala Avenue East and West BPO Towers, Glorietta 1 and 2, business process outsourcing (BPO) buildings at Ayala Center, and MarQuee mall in Pampanga.

Their overall gross leasable area (GLA) is 190,000 square meters (sq.m.), with an overall occupancy rate of 99% and a weighted average lease expiry of 14.5 years.

Both companies are targeting to finalize the deal within the year.

“The infusion of Glorietta 1 and 2 malls and BPO buildings, as well as the brand new One Ayala Avenue BPO towers, is testament to AREIT as Ayala Land’s flagship REIT,” Ms. Mills added.

Currently, AREIT has recorded 673,000 sq.m. equivalent to P64 billion in assets under management (AUM) and a 52% growth in total shareholder returns.

The company said the new infusion in 2023 will nearly triple its AUM to P87 billion and boost its GLA more than fivefold to 863,000 sq.m.

On Tuesday, AREIT shares dropped by 2.78% or a peso to close at P35 apiece. — Adrian H. Halili