RLC infuses P33.9B to REIT arm via asset-for-share swap

CEBU, Philippines — The board of directors of the Robinsons Land (RL) Commercial REIT, Inc. (RCR) and its sponsor, Robinsons Land Corporation (RLC), approved a property-for-share swap on June 5, 2024.

This swap involves 13 commercial assets and will increase RCR's total gross leasable area (GLA) by 347,329 sqm, bringing it from 480,479 sqm to 827,808 sqm.

The property-for-share swap is comprised of 11 malls totaling 278,526 sqm. of leasable space, namely, Robinsons Novaliches, Robinsons Cainta, Robinsons Luisita, Robinsons Cabanatuan, Robinsons Lipa, Robinsons Sta. Rosa, Robinsons Imus, Robinsons Los Baños, Robinsons Palawan, Robinsons Ormoc, and Cybergate Davao, as well as two office assets totaling 68,803 sqm. of leasable space, namely, Giga Tower in the Bridgetowne Destination Estate, Quezon City, and Cybergate Delta 2 in Davao City.

The assets had been selected based on RCR’s investment criteria of maximizing dividend yield accretion through the infusion of high-quality commercial properties that complement the company’s existing portfolio of 16 premium assets.

“We are pleased to announce RCR’s plans to conduct a property-for-share swap for prime malls and offices. Our fund manager, RL Fund Management, Inc., has identified the assets to maximize the additional value delivered to our shareholders. The planned asset infusion will diversify our predominantly office asset portfolio with the inclusion of mall assets. This is in line with RCR’s commitment to shareholders to continuously grow the company,” said Jericho P. Go, president and chief executive officer (CEO) of RCR.

RLC will subscribe to 4,987,641,178 primary common shares of RCR for P6.80 per share, equivalent to a total valuation of P33,915,960,000.00, as supported by a third-party fairness opinion.

The property-for-share swap shall be subject to the approval of pertinent regulatory bodies and shall be presented for approval in the special stockholders’ meeting of RCR scheduled on July 15, 2024, to be completed within the year 2024.

After the infusion, RCR will remain the Philippine REIT with the widest geographical reach, with assets in 18 key locations.

Further, as an expansion of RCR’s portfolio of green-certified assets, Giga Tower has been awarded the Leadership in Energy and Environment Design (LEED) Gold certification in the first quarter of 2022, and Cybergate Delta 2 was able to obtain its Excellence in Design For Greater Efficiencies (EDGE) certification in the first quarter of 2024.

RCR will execute the Deed of Assignment with RLC and apply to the SEC after obtaining stockholder approval.

Revenues shall accrue to RCR starting on April 1, 2024, subject to the approval of the stockholders and pertinent regulatory bodies.

The company targets to secure regulatory approvals for the property-for-share swap within the year. RCR has posted stable financial results in the first quarter of 2024, with total unaudited revenues amounting to P1.43 billion.

Net income for the quarter amounted to P1.12 billion, which translates to a net income margin of 79 percent.

After the infusion, RLC’s current investment portfolio includes approximately 1.4 million sqm. of leasable mall spaces, approximately 253 thousand sqm. of remaining leasable office spaces, 26 hotels with a total of 4,243 room keys, and 244 thousand sqm. of leasable logistics facility.