SEC approves Ayala Land’s REIT offering

The real estate arm of Ayala Corp. has secured the nod of the Securities and Exchange Commission (SEC) for its real estate investment trust (REIT) offering.

In a statement on Friday, the corporate regulator said the commission’s en banc considered “favorably” the registration statement of Ayala Land, Inc. for its proposed REIT initial public offering of 1.092 billion common shares on the main board of the Philippine Stock Exchange (PSE).

Ayala Land’s AREIT, Inc., formerly known as One Dela Rosa Property Development, Inc., will offer as much as 47.86 million new common shares and up to 409.019 million existing common shares, with an over-allotment option of up to 45,688,700 secondary shares, at a maximum price of P30.05 each.

AREIT is seen to fetch at least P1.33 billion in proceeds from the primary offer which it can use to acquire the building of Teleperformance in Cebu to expand its portfolio.

Currently, AREIT owns three commercial buildings: Solaris One, Ayala North Exchange, and McKinley Exchange. Its portfolio excludes the land on which the buildings stand.

Meanwhile, Ayala Land can raise as much as P13.31 billion if the greenshoe option was fully exercised, allowing the public to own almost half of AREIT’s issued and outstanding common shares.

The SEC said Ayala Land will retain its 41.16% stake in the company, while AyalaLand Offices, Inc., its other unit, will hold the remaining 9.39% interest by the end of the offering.

AREIT plans to sell the shares from July 27 to 31 and list them on the stock exchange on Aug. 7.

BPI Capital Corp. will serve as the global coordinator for the share sale. It will also be the sale’s bookrunner, together with UBS AG Singapore, and lead underwriter, along with PNB Capital and Investment Corp. and SB Capital Investment Corp.

AREIT filed with the SEC its registration statement in February, a month after the agency issued the revised implementing rules and regulations of Republic Act No. 9856, or the REIT Act.

The Ayala unit has yet to receive the SEC’s order of registration and permit upon determination of its compliance with regulatory requirements.

AREIT Fund Managers, Inc., previously known as AyalaLand Commercial REIT, Inc., will manage the company’s assets, focusing on generating rental income and increasing its assets over time, while AREIT Property Managers, Inc., formerly Next Urban Alliance Development Corp., will supervise its leases, sell properties, and run the maintenance and repair of the structure and utilities of the properties, among others.

The REIT law states that an offering company should reinvest the net proceeds from its shares sale in real estate and/or infrastructure projects in the Philippines within a year.

Shares in Ayala Land on Friday dropped by 2.88% to close at P32 apiece. — Adam J. Ang