RCR climbs after asset infusion news

INVESTORS flocked to RL Commercial REIT, Inc. (RCR) last week following the announcement of a mall asset infusion from its sponsor worth more than P30 billion via a property-for-share swap.

Data from the Philippine Stock Exchange (PSE) showed that the real estate investment trust (REIT) of Robinsons Land Corp. (RLC) was one of the most actively traded issues last week, with 47.04 million shares exchanged, valued at P341.88 million.

RCR shares closed at P7.38 apiece on Friday, rising by 6% or 42 centavos from their P6.96 finish on June 20. This week-on-week increase outpaced the 1.1% gain of the PSE index and the 5.8% rise of the property sector.

Year to date, the stock has climbed by 26.2%, in contrast to the year-to-date declines of 1.8% in the PSE index and 1.4% in the property index.

The announcement of the asset infusion fueled last week’s rally, said Mr. Jervin De Celis, equity trader at The First Resources Management and Securities Corp.

“The stock has steadily gained and reached P7.50 on June 26 as the infusion bolstered investors’ sentiment in RCR’s long-term growth prospects,” Mr. De Celis said in an e-mail.

“This development is expected to significantly boost revenue, as the addition of nine malls will increase RCR’s total asset value by 27% from P111.93 billion to P142.6 billion,” he added.

In a disclosure to the local bourse on June 20, RCR’s board of directors approved the P30.67-billion property-for-share swap transaction with RLC for the infusion of nine mall assets in exchange for 3.83 million RCR common shares.

The infused assets have a gross leasable area of 324,107.75 square meters. This will expand RCR’s portfolio by nearly 40% to approximately 1.15 million square meters, comprising 38 commercial properties — 21 malls and 17 offices.

The transaction is subject to stockholders’ approval in a special meeting on Aug. 13, as well as to relevant regulatory clearances.

Upon completion, public ownership of RCR will stand at 34.22%, still above the one-third minimum public float required for REITs.

RCR’s net income rose by 47.4% to P1.66 billion in the first quarter, up from P1.12 billion in the same period last year.

Mr. De Celis projects RCR’s second-quarter net income at around P2 billion, and full-year earnings at P7.7 billion.

“This outlook is supported by the company’s strong fundamentals, including a 96% occupancy rate in the first quarter, which significantly outperformed the Metro Manila average vacancy rate of 19.7%,” he said.

For the week, Mr. De Celis placed immediate resistance at the P7.50 level — the intraday high reached on June 26 and a price point last tested in April 2022.

“A breakout above this could trigger further bullish momentum toward P8,” he said. — LPQB