RL Commercial REIT to acquire P7B in property in the next three months
The Gokongwei Family’s REIT will receive two “prime” assets in Q2/22 worth nearly P7 billion from its parent company and sponsor, Robinsons Land [RLC 19.70 0.20%].
The two assets are Cybergate Bacolod and Cyberscape Gamma, which have a combined gross leasable area (GLA) of 55,000 sqm; their addition will increase RL Commercial REIT’s [RCR 7.51 1.49%] GLA by 13% to 480,000 sqm, increasing its lead as the largest office-space REIT by GLA.
RCR said that this transaction is happening “a year ahead of target”, with the Bacolod tower injection happening this month, and the Gamma tower injection happening later in Q2.
RCR will buy the Cybergate Bacolod tower from RLC using a mixture of cash and debt, and will buy the Cyberscape Gamma tower through an asset-for-shares swap with RLC.
MB BOTTOM-LINE
It’s really interesting to see RCR pulling planned acquisitions forward in time.
I’d love to know what prompted the decision to speed up the timeline on these acquisitions, whether it was to reward shareholders amid a growing peer group of attractive REIT alternatives, or whether it was to cash-up at the RLC level to take advantage of some opportunity that presented itself suddenly or sooner than anticipated.
Either way, growth is good.
There’s a lot of activity in the REIT space right now, from IPOs in new sectors with high projected yields, like with Citicore Energy REIT [CREIT 2.68 1.13%] in renewable energy leasing with a 7% projected yield this year, to MREIT’s [MREIT 19.30 3.43%] aggressive push to quadruple in size by the end of the decade.
Maybe, though, what RCR takes as most instructive is the lessons to be learned from DDMP’s [DDMPR 1.73 0.57%] situation, where DDMPR’s seeming disinterest in growth (or even in communications with investors to outline concrete plans) has caused market sentiment to turn sour on the REIT, on its sponsor, DoubleDragon [DD 10.20 2.67%], and on Injap Sia, who owns REIT and sponsor.
If we are eventually going to get the CentralHub REIT from DD and Jollibee [JFC 239.80 3.90%], the Villar Family REIT, and maybe even a REIT from SM Prime [SMPH 37.50 1.35%], it’s in RLC’s and RCR’s best interests to keep RCR’s portfolio growing, to keep the capital flowing back up to RLC, and to keep shareholders of both satisfied with the dividend growth and the direction of the relationship between the two.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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