RCR sees room to take more Robinson Land assets

RL Commercial REIT Inc. (RCR) is seeing more room to expand its current asset portfolio in the next three years. This is so, especially with below-industry vacancy rate across its buildings.

Speaking to reporters in a media chat last week, RCR director and treasurer Kerwin Tan said they currently had around one-third of the assets of Robinson Land Corp. (RLC), its real estate investment trust (REIT) sponsor.

“Potentially, RCR can get two-thirds more of the assets of the sponsor, so it’s basically three times more from the current size potentially,” Tan said.

In April, RLC sold P6.2 billion worth of its shares in RCR. This raised the latter’s public ownership level from 35.93 percent to 42.57 percent. It is above the 33.33-percent minimum for listed REITs.

This will allow the Gokongwei-led developer to inject more assets into its REIT arm.

RLC last year infused P33.9 billion worth of assets into RCR. This was done via a property-for-share swap deal involving 11 malls and two office buildings. They span a total of 347,329 square meters (sq m).

A matter of timing

According to RCR president and CEO Jericho Go, RLC could still inject around 1.3 million sq m of mall space. Likewise with 250,000 sq m of office space and 300,000 sq m of logistics space.

“But timing-wise … that depends on how the market would respond,” Go said. “For you to be able to infuse assets, a certain number of shares will have to be put up.”

Go said that they preferred to get “stabilized properties.” He was referring to those that have been profitable for at least three years and have high occupancy rates.

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RCR data show that the current occupancy rate of its assets stand at 96 percent. This implies a 4-percent vacancy rate.

Based on recent reports by real estate brokers, this is below the 19.7-percent average vacancy rate in Metro Manila seen during the first quarter.

As of end-March, RCR’s gross leasable area reached 828,000 sq m, representing a 72-percent surge. These are composed of 17 offices and 12 malls located in 18 locations across the country.

While they have yet to get logistics assets, Go expressed optimism that they would be able to eventually add these to RCR’s portfolio. This, especially since “a lot of people are actually looking at that particular asset class.”