Ayala-backed AREIT Prices PHs First REIT IPO, Trims Target To $249m

AREIT Inc, the Philippines’ first-ever real estate investment trust (REIT) sponsored by listed property giant Ayala Land Inc, has priced its initial public offering (IPO) at 27 pesos per share as it seeks to raise up to 12 billion pesos ($249 million).

Ayala Land had earlier said that AREIT was seeking to raise up to 15 billion pesos ($303 million) in what will be the country’s first REIT listing, which would allow investors to diversify their portfolio and democratise ownership of real property assets in the Philippines.

In a disclosure to the Philippine Stock Exchange (PSE) on Thursday, Ayala Land said the IPO will include the offer and sale of up to 457 million common shares of AREIT, consisting of 48 million new common shares, 409 million existing common shares offered by Ayala Land, and 46 million optional shares.

AREIT intends to use the net proceeds from the primary offer to fund the intended acquisition of Teleperformance Cebu from ALO Prime Realty Corporation, a wholly-owned subsidiary of Ayala Land. The proceeds from the secondary offer will be reinvested in real estate projects in the Philippines.

About 70 per cent of the shares shall be on offer to international and domestic qualified institutional buyers while the remaining 30 per cent shall be offered to eligible trading participants and local small investors.

The offer period will run from July 27 to August 3, 2020. AREIT’s shares are scheduled to list on August 13.

Assuming full exercise of the overallotment option, the public offering would allow the public to own 40 per cent of the issued and outstanding common shares of AREIT. Ayala Land will retain a 41.61 per cent shareholding in AREIT, while its subsidiary AyalaLand Offices, Inc. will own the remaining 9.39 per cent.

AREIT’s portfolio consists of investment-grade commercial assets in prime business locations in Makati City. All properties are occupied and tenants include BPO companies and multinationals.