Megaworld to inject more office assets to MREIT

Property giant Megaworld Corp. is planning to inject more office assets to its real estate investment trust (REIT) vehicle MREIT Inc., which debuted on the Philippine Stock Exchange on Friday.

The share price of MREIT opened at P16.12 apiece, 0.12% higher than its initial public offering price (IPO) of P16.10 per share.

It hit a high of P17.10 apiece, higher by 6.21% than its IPO price.

Regina Capital Development head of sales Luis Limlingan said MREIT’s IPO was met with strong interests as the company’s price-to-earnings ratio at P16.10 per share “would be roughly 36 times and the annualized dividend yield would be 5.65% and 6.15% for fiscal year 2022 and 2023, respectively.”

During MREIT’s stock market listing ceremony, Megaworld chief strategy officer and MREIT president and CEO Kevin Tan announced that after Megaworld injects around 100,000 square meters of prime office assets from Eastwood City, McKinley Hill, and Iloilo Business Park by end of 2022, the sponsor-company will also be injecting some of its prime office and commercial assets in Uptown Bonifacio into MREIT by 2023.

This year alone, Uptown Bonifacio has close to 331,300 square meters of completed office and commercial projects, he said.

Another 70,000 square meters of prime office spaces are set to be completed in three years, he added.

“These prime office and commercial assets can be potentially injected into MREIT. With BGC having the highest office rental rates among major business districts in the country, these fresh assets can truly bulk up MREIT’s portfolio, increase its rental revenues, and of course, grow the distribution yields for our investors,” Tan said.

MREIT’s initial portfolio consists of 10 prime office buildings covering around 224,431 square meters in Eastwood City, McKinley Hill, and Iloilo Business Park –three of the 27 townships developed by Megaworld.

“So far, we have poured in an estimated P150 billion into these three townships in over a decade that has translated into more than 130,000 jobs in IT (information technology) and BPO (business process outsourcing), retail, hotel and tourism, construction, and in various industries that form part of our townships,” Tan said.

“Once all of the seven office towers in Uptown Bonifacio are completed, the township will have the biggest office portfolio among our 27 township developments. We look forward to having some of these assets become part of MREIT,” he said.

MREIT’s listing at the PSE marks the last Philippine REIT to be listed at the local bourse this year.

A REIT is a stock corporation established principally for the purpose of owning income-generating real estate assets such as apartment buildings, office buildings, medical facilities, hospitals, hotels, resorts, highways, warehouses, shopping centers, railroads, among others.

It is a type of investment instrument that provides a return to investors derived from rental income of the underlying real estate asset.

The REIT Law mandates the annual distribution of at least 90% of a REIT company’s distributable net income to its shareholders.

“Today, we witness yet another affirmation of the power of REITs in mobilizing funds for our economy’s development and opening doors for small investors to participate in the capital market,” Finance Secretary Carlos Dominguez said in a message during MREIT’s listing ceremony.

“Megaworld REIT promises to be the country’s fastest-growing REIT. I am optimistic that the company can achieve this given its unmatched track record in property development. Its credible reputation provides Megaworld a strong springboard for this public offering,” Dominguez added.—AOL, GMA News