Megaworld raises P5.6B from MREIT shares

Megaworld Corp. has raised P5.6 billion through multiple block sales of MREIT Inc. shares as it gears up for the fifth wave of asset infusions into its real estate investment trust. The proceeds are earmarked for new township developments across the country.

The Andrew Tan-led property giant said on Monday that the block sales were completed between April and July this year as part of its capital recycling strategy. This enabled the firm to unlock value from mature, income-generating assets and channel the funds into new offices, malls, hotels and other projects that will expand its recurring income portfolio.

The upcoming “Wave 5” asset infusion will add about 303,500 square meters (sq m) of gross leasable area (GLA) to MREIT. This would bring its total portfolio to more than 950,000 sq m and put it within reach of its one-million-sq-m milestone ahead of its 2027 target.

Beyond office buildings

The transaction will also diversify MREIT’s portfolio beyond office buildings. From having more than 95 percent of its assets in offices, the REIT’s mix will shift to about 77 percent office, 20 percent mall and 3 percent hotel properties.

Megaworld president and CEO Lourdes Gutierrez-Alfonso said the REIT enables the company to accelerate township development by recycling capital from stabilized assets into the next generation of income-producing projects.

“Our townships are designed to grow holistically. As each estate matures, it creates new opportunities to introduce offices, malls, hotels, residences and lifestyle destinations that reinforce one another,” Gutierrez-Alfonso said.

The company said the fresh capital will support developments in several provincial growth centers, including the 462-hectare Paragua Coastown in San Vicente, Palawan; The Upper East in Bacolod City; Capital Town in the City of San Fernando, Pampanga and; The Mactan Newtown in Lapu-Lapu City, Cebu, as well as projects in Iloilo and Cavite.

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Part of the proceeds will also be invested in ArcoVia City in Pasig City.

Different property segments

MREIT chair Kevin Tan said the fifth asset infusion represents more than just an expansion in size, as it broadens the REIT’s exposure to different property segments within Megaworld’s integrated townships.

The company added that it remains on track to its long-term leasing strategy of expanding its office GLA to two million sq m and retail GLA to one million sq m by 2030, for a total leasing portfolio of three million sq m.