Property developer Megaworld Corp. said Friday it raised P3.63 billion from an overnight placement of shares in real estate investment trust company MREIT Inc.
Megaworld said it sold 279.4 million shares in MREIT at P13 apiece, representing a 7.1-percent discount to MREIT’s closing price of P14 Thursday.
Megaworld said the transaction was upsized by 10 percent from 254 million to 279.4 million shares on strong demand from domestic and international long-only investors.
The property firm said the transaction increased MREIT’s free float to provide headroom for future acquisition of assets via property-for-share swap.
Megaworld said it would use the proceeds from the equity deal to fund further development of high quality commercial assets, helping to build on existing portfolio and expanding the pipeline of potential acquisition opportunities for MREIT.
“At the MREIT level, we are pleased to have several institutional investors on board. This investment demonstrates confidence in MREIT’s potential as a strong and attractive long-term investment opportunity,” said MREIT president and chief executive Kevin Tan.
Megaworld said after the transaction, it would continue to hold 55.6-percent ownership in MREIT.
UBS AG acted as sole placement agent for the transaction.
MREIT’s portfolio covers 18 office buildings with 325,000 square meters of gross leasable space.
MREIT reported plans in June to acquire seven grade A office assets from Megaworld with a total gross leasable area of 150,500 square meters. These properties are located in Taguig, Iloilo and Davao.
Once completed, MREIT will expand its portfolio to around 475,500 sq. m. of leasable space, bringing it closer to its target of 500,000 sq. m. of assets under management by end-2024.
MREIT has injected eight office buildings into its portfolio and grew its value by 25 percent to P62 billion, following two sets of previous acquisitions since its IPO in 2021.