MANILA, Philippines — MREIT Inc., the REIT company of Andrew Tan-led Megaworld Corp., reported a distributable income of P2.1 billion, up by 13 percent from the P1.9 billion recorded a year ago.
The company registered P3.1 billion in revenue, 15 percent higher than the P1.8 billion reported last year.
This was primarily due to the income contribution beginning this year of MREIT’s four newly-acquired Grade-A office towers worth P5.3 billion.
Aside from the new assets that drove the majority of the revenue growth, continued rental escalations of existing tenants also supported MREIT’s revenue growth.
MREIT president and CEO Kevin Tan said the performance of the company has been consistent in delivering solid results.
“We remain committed to sustaining our earnings growth and distributions by ensuring high occupancy and implementing escalations when possible. We are also actively seeking opportunities for growth through strategic acquisitions, so long as the valuations remain beneficial for our shareholders,” Tan said.
MREIT recorded an average occupancy rate of 95 percent as of end-September 2023 or above the broader office industry’s average occupancy rate of around 81-82 percent in Metro Manila, the company said citing industry data.
BPO and traditional offices comprise the majority of the company’s tenants with long-term commitment to their leases and operations.
MREIT’s gross leasable portfolio is expected to increase by 46 percent to 475,500 square meters, putting the company on track to reaching its target portfolio of 500,000 sqm of GLA by end-2024.
The increase will come from the completion of an acquisition deal signed with Megaworld in June.
MREIT and Megaworld signed a memorandum of understanding (MOU) for the potential acquisition of seven grade A office assets with a total gross leasable area (GLA) of around 150,500 sqm.
These include buildings located in Megaworld townships McKinley Hill, McKinley West, Iloilo Business Park, and Davao Park District.
“While our recent MOU with Megaworld is focused on office spaces, we are also keenly observing the impressive growth of Megaworld’s retail assets. Average daily tenant sales of Megaworld’s malls have surpassed 2019 levels by a large margin, underscoring the strength of consumer spending despite macroeconomic headwinds,” Tan said.
At present, MREIT’s portfolio comprises 18 office properties located in four Megaworld premier townships.
These office buildings are the 1800 Eastwood Avenue, 1880 Eastwood Avenue, and E-Commerce Plaza located in Eastwood City; One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley, and World Finance Plaza in McKinley Hill; One Techno Place, Two Techno Place, Three Techno Place, One Global Center, Two Global Center, Festive Walk 1B, and Richmonde Tower in Iloilo Business Park; and One West Campus and Five West Campus in McKinley West.