Megaworld to use proceeds in MREIT block sale for expansion

To bankroll expansion projects in the pipeline, billionaire Andrew Tan’s Megaworld Corp. has raised P500 million from the sale of its shares in real estate investment trust unit, MREIT Inc.

In a stock exchange filing on Friday, township developer Megaworld said it sold 40.65 million of its shares in MREIT for P12.30 each via a block sale.

This is equivalent to 1.5 percent of MREIT’s total outstanding shares.

“[Megaworld] will allocate the proceeds from the transaction to enhance its development pipeline, further expanding the opportunities for MREIT,” MREIT president and CEO Kevin Tan said in a disclosure.

“This investment underscores the confidence in MREIT’s potential as an attractive and valuable long-term investment opportunity,” he added.

Megaworld still holds a majority stake, at 54.2 percent, after the sale.

Last year, MREIT signed a memorandum of understanding for the acquisition of seven Grade A office assets from its parent company and sponsor.

The assets have a total gross leasable area of 150,500 square meters (sqm). Upon acquisition, MREIT will grow its portfolio by 46 percent to 475,500 sqm.

“We are on track to expand MREIT’s total [gross leasable area] to 500,000 sqm by end-2024. This highlights our commitment to continuously enhancing shareholder value and fostering MREIT’s growth,” Tan said.

Megaworld in 2023 saw a record income of P19.4 billion, up by 26 percent, as residential sales and earnings from malls and hotels grew.

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The developer rolled out last year P72.6 billion worth of projects, equivalent to a 61-percent increase. Leasing revenues also swelled by 14 percent to P17.9 billion.

Meanwhile, high occupancy rates buoyed MREIT’s earnings last year, climbing by 13 percent to P2.8 billion.

Revenues likewise rose by 14 percent to P4.2 billion on the addition of new Grade A office towers to its portfolio.

Occupancy rate was at 96 percent, higher than the Metro Manila office industry average of 81 percent to 88 percent. INQ