RLC executes P30.67-B property-for-share swap deal with REIT

Robinsons Land Corp. (RLC) has consummated a deal to inject P30.67 billion worth of mall assets into its real estate investment trust (REIT) in exchange for shares, allowing the latter to broaden its portfolio that was previously office-dominated.

In a regulatory filing on Wednesday, RLC said it had executed its fourth such property-for-share swap with RL Commercial REIT Inc. (RCR).

The agreement involves nine commercial assets with a total 324,108 square meters (sq m) of gross leasable area. These are Robinsons Dasmariñas, Robinsons Starmills, Robinsons General Trias, Robinsons Cybergate Cebu, Robinsons Tacloban, Robinsons Malolos, Robinsons Santiago, Robinsons Magnolia and Robinsons Tuguegarao.

“The properties are expected to contribute further to RCR’s cash flows, increasing its dividends per share,” RCR said in a separate disclosure.

In exchange, RLC will get 3.83 billion RCR common shares at P8 each, a 1.3-percent premium over its closing price of P7.90 on Wednesday.

After the transaction, RLC will own 65.62 percent of the total shares of RCR from 57.23 percent previously. This will bring RCR’s public ownership level to 34.38 percent, or still above the 33.33-percent minimum for listed REITs.

The asset infusion will likewise expand RCR’s portfolio by 39.15 percent to 1.15 million sq m, the REIT said. This will span 38 commercial real estate assets consisting of 21 mall assets and 17 office assets.

Tax-free

RCR is set to secure a certificate authorizing registration from the Bureau of Internal Revenue to confirm the transfer of the properties. After this, issuance of the shares will be tax-free.

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In April, RLC raised P6.2 billion from the sale of its shares in RCR, which was meant to allow it to infuse more assets into the latter.

Last year, RLC injected P33.9 billion worth of assets into RCR also through a property-for-share deal involving 11 malls and two office buildings. The malls are located in Novaliches, Cainta, Luisita, Cabanatuan, Lipa, Sta. Rosa, Imus, Los Baños, Palawan and Ormoc.

The assets span a total of 347,329 sq m. In turn, RLC subscribed to 4.99 billion of RCR’s primary common shares at P6.80 each.