Megaworld’s MREIT sets final IPO price at P16.10/share

Megaworld Corp.’s real estate investment trust company, MREIT, set its final offer price at P16.10 per share, as reported by Philippine Star

The company slashed the size and price of its upcoming maiden share sale in an effort to stimulate demand for what was once the biggest initial public offering of a REIT firm in the Philippines.

MREIT announced it would offer 844.3 million common shares at P16.10 a piece. If there’s strong investor demand, the firm has an option to sell 105.5 million more common shares. Coupled with the overallotment option, MREIT is expected to earn almost P15.3 billion in gross proceeds.

Initially, MREIT was planning to sell 1.1 billion shares with an overallotment option of 161.7 million shares at P22 per piece. The firm would have generated up to P27.3 billion in gross proceeds.

April Lee Tan, research head at COL Financial, said that the initial offer may not have been very attractive to investors, but the new lower price may result in stronger investor demand and the yield will be higher and more attractive.

The offer period for the sale will take place from September 14 to 20, and the listing date is scheduled on September 30. 

MREIT’s impressive portfolio

MREIT’s portfolio encompasses 10 retail, office, and hotel assets with an aggregate gross leasable area of 224,340.80 sq.m. 

These properties are situated in three of Megaworld’s key townships, namely McKinley Hill in Taguig City, Eastwood City in Quezon City, and Iloilo Business Park in Mandurriao, Iloilo City. 

Kevin Andrew Tan, president and CEO of MREIT, said that these areas are home to over 200,000 business process outsourcing (BPO) and other office workers. Over 200 multinational companies and BPO firms alone have chosen Eastwood Cyberpark as their base of operations. 

Properties in the REIT portfolio include 1880 Eastwood Avenue, One Techno Place, One World Square, 8/10 Upper McKinely, E-commerce Plaza, and Richmonde Tower.

Currently, Megaworld has about 1.4 million sq.m. of office space in ten different cities across the country. It manages a range of office and retail spaces, supervises hotel operations, and oversees real estate sales of residential properties. 

Eastwood Cyber One Corp., Empire East Land Holdings Inc., Richmonde Hotel Group International Ltd., Suntrust Properties Inc., Bonifacio West Development Corp., and Global-Estate Resorts Inc. are among the company’s subsidiaries. 

Megaworld is also leading the charge for sustainability, with over 70 green real estate developments, 19 green buildings, and more than 1,500 hectares of forest lands under its management. 

The growing market for REITs

MREIT is just one of the many companies entering the quickly expanding list of REITs that debuted in the past few years. Other REITs currently in the market include Ayala Land Properties’ AREIT, DoubleDragon Properties’ DDMP Reit Inc., and Filinvest’s FILREIT.

The REIT law was passed in the Philippines more than a decade ago in an effort to promote the development of the country’s capital market. Over the past few years, the legislation was overhauled to broaden access and provide more attractive incentives for investors to participate.

REITs are public-owned listed companies that are required to dedicate proceeds from their share sale to purchase and manage income-generating assets such as warehouses, offices, hotels, and malls, among many others. 

Companies are required to declare no less than 90 percent of income collected from these ventures as dividends with shareholders. These earnings are also reinvested in the development of the country.

According to JLL Philippines, a leading property management and consultancy services firm, REITs will play a large role in helping the country’s property industry recover from the hit it took due to the on-going COVID-19 health crisis.  

Experts from the Asia Pacific Real Estate Association (APREA) say that the entry of new REIT players in the country will strengthen the industry further. Other property companies that are set to make their debut in the sector in the near future include Vista Land, Robinsons Land Corporation, and Ortigas Land. 

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Source: Philippine Star

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