Shareholders ok P28.6-B new asset infusion to AREIT

AREIT Inc. is poised to complete its biggest property deal to date as shareholders ratified on Monday a plan to issue shares in exchange for commercial buildings and industrial land worth about P28.6 billion.

AREIT, the real estate investment trust (REIT) arm of Ayala Land Inc., said majority of stockholders approved the issuance of 841.26 million shares at P34 each to affiliates Greenhaven Property Ventures Inc., Cebu Insular Hotel Co. Inc. and Buendia Christiana Holdings Corp., a wholly owned subsidiary of ACEN Corp. The commercial properties include Ayala Triangle Gardens Tower 2, luxury mall Greenbelt wings 3 and 5 and Holiday Inn and Suites in Makati, as well as Seda Hotel at Ayala Center Cebu. The ACEN property is a 276-hectare (ha) industrial estate in Zambales province in Luzon. AREIT’s share price has been weighed down by dilution concerns since the issuance of shares to affiliates would cause its public ownership level to fall below the minimum 33 percent requirement of the Philippine Stock Exchange.

Its shares slipped 0.29 percent to P34 each on Monday.

Ayala Land sold part of its AREIT stake to boost the company’s public ownership ahead of the transfer of assets.

Ayala Land and its subsidiaries raised P5.63 billion from the sale of 181 million AREIT shares at a discounted price of P31.10 each last Jan. 26.

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Calculations by stock brokerage house COL Financial Group indicated that AREIT’s major shareholders would need to sell another 79 million shares or about P2.7 billion worth of stocks.Earlier, AREIT said the new commercial projects and industrial land would increase its assets under management to P117 billion, hike its gross leasable building area to more than 1 million square meters and boost its leased industrial land area to 286 ha by 2024.

“We deliberately planned the acquisitions to have a healthy mix of malls, offices, hotels and industrial properties, which broadens our portfolio and mitigates concentration risk to a particular sector,” Carol Mills, AREIT president and CEO, said in a previous statement.