MREIT president Kevin Tan said the company downsized its IPO and priced it at P16.10 per share, below the maximum proposed price of P22 in its desire to please investors.
“The company has decided to price the deal at an attractive level to provide more upside to IPO investors who will be its long-term partners in this new journey. At this IPO price, MREIT will be offering investors an attractive dividend yield of 5.65 percent to be distributed quarterly, and at the same time, we will be giving them exposure to high quality, fast-growing portfolio of assets,” said Tan, who is also chief strategy officer at Megaworld.
“If we exercised full option, it would have still been oversubscribed 1.5x. At this current size we are 2x,” he pointed out.
From the original plan of 1.078 billion shares, MREIT’s offer size has been whittled down to 949.84 million shares including an overallotment option of up to 105.54 million shares.
At its new price, MREIT’s maiden share sale could generate up to P15.3 billion, enough to support Megaworld’s 21 projects across the country in the next 12 months.
MREIT owns 10 office buildings catering to outsourcing firms and a hotel with a gross leasable area of nearly 225,000 square meters (2.4 million square feet), equivalent to 31 soccer pitches. It will add five more income-generating assets totaling 100,000 sqm in 2022, which is seen to boost the company’s dividends to shareholders.
“MREIT, being Megaworld’s flagship REIT, is being structured to deliver fast growth and strong aftermarket performance,” Tan said.
Tan said Megaworld would maintain a 62.5% stake in MREIT “to capture more near term and long term valuation upsides for its shareholders as MREIT actively grows its portfolio with the maturation of the overall REIT industry in the Philippines.”