MREIT gets SEC OK for P13 billion office deal

MANILA, Philippines —  The listed real estate investment trust (REIT) of Andrew Tan’s Megaworld Corp. has secured its regulator’s approval to acquire six properties worth P13.15 billion, expanding its revenue sources before the year ends.

In a disclosure to the Philippine Stock Exchange, MREIT Inc. said it has received approval from the Securities and Exchange Commission (SEC) to proceed with its acquisition of six prime office assets.

The deal includes Two West Campus, Ten West Campus and One Le Grand in McKinley West in Taguig City; One Fintech and Two Fintech in Iloilo Business Park; and Davao Finance Center in Davao City.

In turn, MREIT will issue 926.16 million primary shares to be sold at P14.2 a piece. MREIT said the value was based on independent appraisals and third-party opinions, and it was also checked by the company’s internal committees and board of directors.

The acquisition will broaden MREIT’s portfolio by almost half, or by 156,631 square meters. As a result, the REIT arm of Megaworld expanded its gross leasable area to 482,055 sqm.

To date, MREIT owns 24 high-value office properties in Megaworld townships: Eastwood City, McKinley Hill, McKinley West, Iloilo Business Park and Davao Park District.

MREIT president and CEO Kevin Tan said the addition of new properties in the portfolio brings in fresh revenue sources that would begin contributing this fourth quarter.

“These high-quality, income-generating assets will start contributing to MREIT’s income by the fourth quarter of this year, further enhancing value for our shareholders and ensuring a sustained growth in dividends,” Tan said.

The acquisition also bodes well for MREIT in its push to grow in high-volume areas, providing leverage in a volatile market like office leasing. Tan believes that the transaction, at the end of it, solidifies MREIT as one of the leading REITs in the Philippines.

In June, Tan announced that MREIT would push through with the diversification of its portfolio as part of its blueprint to grow outside office leasing. In particular, the company plans to become an owner of retail assets, too.

MREIT is also evaluating opportunities in other property types within the Megaworld Group, as it seeks to raise value to build up its position as one of the leading REITs.

Before the decade ends, MREIT targets to achieve a gross leasable area of one million sqm.