Property developer Ayala Land Inc. (ALI) is infusing P23 billion worth of prime office, mall and hotel properties into real estate unit AREIT Inc. via a property-for-share swap deal.
The asset infusion includes ALI’s premium office tower Ayala Triangle Gardens Tower 2, luxury mall Greenbelt 3 and 5, Holiday Inn and Suites Makati and Seda Ayala Center Cebu. Combined, these assets were valued at P21.8 billion and validated by a third-party fairness opinion.
The companies said that in exchange of these assets, ALI and its subsidiaries Greenhaven Property Ventures Inc. and Cebu Insular Hotel Co. Inc. will subscribe to 642.149 million AREIT primary common shares.
AREIT will also acquire Seda Lio in El Nido, Palawan from ALI subsidiary Econorth Resort Ventures Inc. for P1.19 billion. The acquisition is expected to immediately contribute to AREIT’s income in the first quarter of 2024.
AREIT is the first and largest real estate investment trust company in the Philippines. Since its initial public offering in 2020, ALI infused P59 billion in total assets into AREIT.
The latest infusions will bring AREIT’s assets under management (AUM) to P117 billion, its gross leasable building area to more than a million square meters and its leased industrial land area to 286 hectares by 2024.
ALI said the acquisition of prime commercial properties is aligned with AREIT’s objectives to significantly expand and diversify its portfolio to capitalize on various growth opportunities across real estate sectors.
The land acquisition will also provide AREIT shareholders with the potential long-term capital appreciation, while earning guaranteed lease income on the property.
“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,” said AREIT president Carol Mills.
“We deliberately planned the acquisitions to have a healthy mix of malls, offices, hotels, and industrial properties, which broadens our portfolio and mitigates concentration risk to a particular sector,” she said.