MREIT doubling portfolio with Megaworld assets
MREIT Inc. plans to double its portfolio to one million square meters (sq m) of gross leasable area (GLA) by 2027 by targeting the retail assets of its sponsor, Megaworld Corp.
MREIT disclosed on Monday they wanted to take advantage of continued growth in consumer spending and strong momentum in mall leasing.
“Our goal is to diversify our portfolio and expand our revenue base,” MREIT chair Kevin Tan said in a statement. “So while the country is experiencing an impressive growth in consumer activities, we want to tap into these opportunities.”
Megaworld currently has 500,000 sq m of retail GLA that may potentially be infused into MREIT. Once these assets are injected into MREIT, its portfolio would reach one million sq m.
According to MREIT, foot traffic at Megaworld Lifestyle Malls has already surpassed prepandemic levels. This was mainly due to strong leasing activities from both local and international brands.
Mall occupancy reached a record-high 93 percent in the first semester. This helps make the retail sector an attractive investment opportunity.
MREIT’s portfolio is spread across Megaworld’s townships. These include Eastwood City, McKinley Hill, McKinley West, Iloilo Business Park and Davao Park District.
In the first six months of the year, MREIT’s distributable income surged by 26 percent to P1.86 billion. This was driven by gains from six newly acquired properties and better occupancy levels.
Its revenues likewise swelled by 28 percent to P2.7 billion.
At the same time, Megaworld plans to grow its office GLA to 2 million sq m and its retail GLA to one million sq m by 2030. This would bring its total leasing portfolio to 3 million sq m.
Megaworld also recently sold P2.24 billion worth of its shares in MREIT. This makes room for possible asset infusions in the future.
This raised MREIT’s public ownership level to 40 percent. It is above the 33.33-percent minimum requirement for real estate investment trusts.
According to MREIT, Mactan Newtown in Cebu will get P830 million of the total proceeds. Paragua Coastown in Palawan will be allocated P845 million, while the Bacolod township will be allocated P537.92 million.
