Areit Inc. looks to increase its deposited property value to P52 billion following Ayala Land Inc.’s (ALI) P15-billion asset infusion.
In a disclosure on Wednesday, the country’s first real estate investment trust (REIT) said its board approved increasing its capital stock to P29.5 billion from P11.74 billion, as well as Ayala Land’s shares subscription in exchange for its P15.46-billion commercial properties.
This comes a day after Ayala Land’s executive committee approved the infusion of its identified commercial properties into Areit under a property-for-share swap transaction.
Ayala Land will subscribe to 483.25 million primary common shares of Areit at P32 per share, to be validated by a third-party for fairness.
The property developer’s infusion will also increase Areit’s leasing portfolio to 549,000 square meters (sqm) from 344,000 sqm.
The transaction is still subject to the approval of Areit’s stockholders at their annual meeting next month, and of regulatory bodies.
“We are excited to present this transaction to our shareholders as we deliver on our commitment to expand further and create more value,” Areit President and Chief Executive Officer Carol Mills said in the disclosure.
“Notwithstanding ALI’s increased ownership, Areit’s dividend per share is projected to grow with the addition of these new assets. At the exchange price of P32 per share, these assets to be infused are yield accretive to Areit at 6 percent,” she added.
Last year, Areit’s earnings stood at P1.23 billion, while its revenues hit P1.95 billion, 3 percent higher than the amount in its REIT plan.
Areit shares added 30 centavos or 0.92 percent to close at P32.80 apiece on Wednesday.