Megaworld Corp. said Friday it raised P500 million from the sale of 40.65 million common shares in real estate investment trust company MREIT Inc.
MREIT said in a disclosure to the stock exchange Megaworld sold 40.65 million shares, or about 15 percent of the company’s outstanding shares at P12.30 apiece.
The selling price of P12.30 apiece represents a 4-percent discount to MREIT’s closing price of P12.80 on Thursday.
MREIT president and chief executive Kevin Tan said Megaworld would use the proceeds to enhance its development pipeline, which will further expand the opportunities for MREIT.
“This investment underscores the confidence in MREIT’s potential as an attractive and valuable long-term investment opportunity,” said Tan.
BDO Securities acted as the broker for the transaction.
Megaworld said it would continue to own a majority stake in MREIT with 54.2-percent stake, post-transaction.
MREIT’s public float will increase to 44 percent, providing further headroom for the upcoming property-for-share swap deal.
MREIT signed an agreement to acquire seven grade A office assets from Megaworld with a total gross leasable area (GLA) of 150,500 square meters in 2023.
Once completed, MREIT’s portfolio will grow to 475,500 sqm, an increase of 46 percent from the current 325,000 sqm.
MREIT’s portfolio covers 18 office properties located in four Megaworld premier townships with an average occupancy rate of 96 percent.
MREIT’s registered a distributable income of P2.8 billion in 2023, up by 13 percent from the P2.5 billion in 2022.
Revenues also grew 14 percent year-on- year to P4.2-billion, fueled by the full-year contribution of the additional four Grade-A office towers from January 2023.
“We are on track to expanding MREIT’s total GLA to 500,000 sqm by end-2024. This highlights our commitment to continuously enhancing shareholder value and fostering MREIT’s growth,” said Tan.