MANILA, Philippines — After announcing the biggest real estate investment trust (REIT) offering in the country, Megaworld Corp. plans to use proceeds from the mammoth maiden share sale to expand its real estate empire.
In a disclosure to the stock exchange on Friday, the listed property firm of tycoon Andrew Tan announced it will build 21 office and commercial projects across 11 townships around the Philippines for the next five years following the planned P27.3 billion initial public offering of its REIT company, MREIT Inc.
Related Stories
“All of these new developments will spruce up our new townships, and at the same time, further expand our rental income portfolio. More than 70% of these new projects are office developments,” Kevin Tan, company chief strategy officer, said.
These projects will be situated in commercial hubs. Megaworld announced 15 planned office projects spread across its property investments in the cities of Pasig, Taguig, Iloilo, Bacolod, Davao, San Fernando in Pampanga and Cebu.
Aside from office spaces, Megaworld will construct five malls in Bacolod, Pampanga, Cavite and Rizal and a hotel in Cebu.
Since REITs are publicly-listed companies, they are required to use proceeds from the share sale to buy and manage income-generating properties. In turn, 90% of income from these assets are required to be declared as dividends rewarded to investors.
As it is, MREIT would join the country’s growing REIT club that already includes Ayala-backed AREIT Inc. and DoubleDragon Properties Inc.’s DDMP REIT Inc. Apart from Megaworld, Robinsons Land Corp. and Filinvest Group are also preparing for the stock market debut of their own REIT firms.
On Friday, shares in Megaworld shed 2.51% to cap the week at P3.11 each.