RCR shares down after block sale, shifting REIT sentiment

RL COMMERCIAL REIT, Inc. (RCR) shares declined last week, with analysts citing pressure from an overnight block sale and shifting sentiment on the sector.

Philippine Stock Exchange (PSE) data showed that Robinsons Land Corp.’s (RLC) REIT was the fifth most traded stock of the week, with 157.02 million shares worth P1.22 billion changing hands by Friday.

RCR’s share price fell by 8.5% to P7.56 from P8.26 in the previous week’s close. The week-on-week drop was steeper than those of the PSE index (PSEi) at 4.8% and the property sector at 3.8%.

Year to date, however, the stock has risen by 29.2% from its P5.85 close on the last trading day of 2024, outperforming the PSEi’s 7.7% decline and the property sector’s 2.2% dip.

On Tuesday last week, RLC completed a block sale of RCR shares at P7.75 apiece. The offering, which was oversubscribed by over 3.7 times, was increased to one billion shares.

Alexandra G. Yatco, equity analyst at Regina Capital Development Corp., said in a Viber message that the sale may have created short-term downward pressure on the stock “due to an increased share supply.”

The sale raised RCR’s public float to 7.69 billion shares, or 39.34% ownership.

“This move may have led to concerns about dilution, [sparking] selling,” Ms. Yatco added.

DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a separate Viber message that the stock’s price was pulled lower by “additional selling pressure” after trading near the P7.75 block sale price.

“The discounted block sale price contributed to its sharper week-on-week decline versus the property index,” he added.

Both analysts also noted that market conditions for REITs weighed on RCR during the week.

Ms. Yatco said that “shifting sentiment” on the real estate sector may have dragged property stocks, including RCR.

Mr. Tin added that cautious signals from the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve on possible rate cuts also dampened sentiment.

Fed Chairman Jerome H. Powell told Reuters there is currently no “risk-free path” for monetary policy, adding that the Fed must weigh both high inflation and a weakening job market.

In the Philippines, BSP Governor Eli M. Remolona, Jr., said rate cuts in the two remaining policy meetings this year are “possible but not likely,” describing current policy as a “goldilocks rate.”

Looking ahead, Ms. Yatco said RCR’s performance will depend on investor response to the company’s reinvestment plan for the P7.75 billion raised from the block sale, as well as upcoming releases of inflation and employment data on Oct. 7 and 8.

Mr. Tin said bargain hunting may also emerge after last week’s drop, with dividend investors seeking to lock in attractive yields.

He added that RCR’s upcoming dividend could see “modest growth” from income contributions of nine malls infused in August under a property-for-share swap with RLC.

On Sept. 5, the Securities and Exchange Commission certified the value of RLC’s properties at P30.67 billion, to be paid through the issuance of 3.83 million additional RCR shares.

Mr. Tin said more asset infusions are possible as the REIT works toward building a P300-billion portfolio within three years. He projected RCR’s revenues to grow 4% in the third quarter and 32.98% for full-year 2025.

Ms. Yatco placed support and resistance levels at P7.45 and P7.70, respectively, while Mr. Tin identified near-term support at P7.45 and immediate resistance at P8.25. — Matthew Miguel L. Castillo