LISTED property developer Ayala Land, Inc. (ALI) is set to infuse prime commercial properties valued at P23 billion into AREIT, Inc. to bolster the latter’s assets under management (AUM) next year.
In a regulatory filing on Thursday, ALI identified the assets as Ayala Triangle Gardens Tower 2 office tower located at the corner of Paseo de Roxas and Makati Ave.; luxury mall Greenbelt 3 and 5; Holiday Inn and Suites Makati at Ayala Center; and Seda Ayala Center Cebu.
AREIT said its board of directors approved the planned 2024 asset infusions into the listed real estate investment trust.
ALI and its subsidiaries Greenhaven Property Ventures, Inc. and Cebu Insular Hotel Co., Inc. will subscribe to 642.15 million AREIT primary common shares at P34 per share in exchange for the Makati and Cebu prop-erties valued at P21.8 billion. The transaction is subject to the approval of AREIT shareholders during a special stockholders’ meeting in February 2024.
AREIT will also acquire Seda Lio resort in El Nido, Palawan from ALI subsidiary Econorth Resort Ventures, Inc. for P1.19 billion. The transaction will contribute to AREIT’s income by the first quarter of next year.
The ALI properties will be acquired alongside the company’s P6.77 billion purchase of Buendia Christiana Holdings Corp.’s 276-hectare industrial land in Zambales, which will be leased by ACEN Corp. subsidiary Giga Ace 8, Inc. for its solar plant operations.
“AREIT will execute the deed of exchange with ALI, its subsidiaries, and BCHC and apply for its approval with the SEC by March 2024. The new shares will be issued, and the income from the assets shall accrue to AREIT upon ap-proval,” the company said.
The acquisitions will bring AREIT’s AUM to P117 billion, while its gross leasable building area will reach over one million square meters, and its leased industrial land area will expand to 286 hectares by 2024.
According to AREIT, the acquisition of commercial properties and industrial land is part of the company’s plans to expand and diversify its portfolio.
“We believe in the synergistic goals between ALI as Sponsor and AREIT. ALI has infused a total of P59 billion in assets into AREIT since its IPO in 2020,” AREIT Chairperson and ALI President and Chief Executive Officer Anna Ma. Margarita B. Dy said.
“The inclusion of Ayala Tower Two and Greenbelt 3 and 5 — some of ALI’s prime assets in Makati, is a testament to our continued commitment to AREIT’s long-term growth,” she added.
AREIT President and Chief Executive Carol T. Mills said the company “deliberately planned” the acquisitions to consist of malls, offices, hotels, and industrial properties to broaden its portfolio and reduce concentra-tion risk to a particular sector.
“We are laying the groundwork to accelerate AREIT’s expansion. With Ayala Land’s deep pipeline of commercial assets as well as other strategic properties in the Ayala Group, AREIT can have the capacity to grow immensely and attain a market presence at par with some of the REIT players in the region,” Ms. Mills said.
AREIT posted a 42% increase in its nine-month net income to P3.43 billion while its total revenues improved by 41% to P5 billion.
Shares of AREIT at the local bourse rose 1.65 points or 5.85% to P29.85 apiece while ALI shares jumped by 1.05 points or 3.48% to P31.20 each on Thursday. — Revin Mikhael D. Ochave