AREIT sells office condos to support Seda Lio takeover

The real estate investment trust (REIT) arm of the Ayala group has raised P42.7 million to fund its acquisition of Seda Lio hotel in El Nido, Palawan province.

AREIT Inc. on Monday said it had sold three office condominium units at Ayala-Life FGU Center Alabang totaling 339 square meters to Muntinlupa-based developer NextAsia Land Inc.

“The proceeds received from the sale of the three office condominium units will be used in [the] acquisition of Seda Lio,” AREIT said in a stock exchange filing.

This comes eight months after the country’s first REIT announced its P1.2-billion takeover of the 153-room hotel in Palawan.

Seda Lio, which is operated by AREIT sponsor Ayala Land Inc. (ALI) via subsidiary Econorth Hotel Ventures Inc., currently caters to tourists, families and social and corporate events, among others.

AREIT paid around P1.06 billion, or 95 percent of the purchase price, in January. Under the deal, AREIT needs to pay the balance of P59.6 million within this month, but the company has yet to clarify whether there would still be a remaining balance after its latest asset sale.

Former AREIT president and CEO Carol Mills said in January that this acquisition would raise the company’s assets under management to P117 billion from P87 billion previously.

This is also quadruple its asset size from when it listed in 2020, according to Mills.

Earlier, the firm announced plans to diversify its portfolio via property infusions from ALI worth P21.8 billion.

These include Ayala Triangle Gardens Tower 2, Greenbelt 3 and 5 and Holiday Inn and Suites in Makati City and Seda Hotel in Cebu.

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AREIT will likewise take over a 276-hectare industrial land in Zambales province from Buendia Christiana Holdings Corp., a wholly owned subsidiary of listed energy firm ACEN Corp.

New property acquisitions caused AREIT’s first-semester net income to soar by 40 percent to P2.87 billion.

Total revenues, meanwhile, surged by 43 percent to P4.3 billion, driven by higher rental income and dues.

Rental income rose by 38 percent to P3.14 billion on the back of fresh gains from One Ayala West and East Towers, Glorietta 1 and 2 BPO (business process outsourcing) and mall wings and Marquee Mall that were all acquired in July 2023.