The initial public offering of Megaworld-sponsored MREIT Inc. is shaping up to be a big success.
In an interview with ANC, BDO Capital president Ed Francisco said the IPO has received an overwhelming response from some of the world’s largest fund managers and high net worth individuals.
Francisco said the decision to downsize the offering and IPO price was warmly welcomed by investors as orders kept pouring in. The IPO is already two times oversubscribed and could generate even more investor demand.
“We spoke to the big funds, and basically, the big funds and high net worth investors of these funds were the ones who ordered. No final numbers yet. But, we were looking at least in the foreign institutional investors and foreign domestic investors, so that was a very good feedback that we got. We’re very happy.
“And that’s why we’re bidding the price down and the effective price also went down. So that’s why there’s that interest and we’re pleasantly surprised that there’s more people coming out saying they will wait but now that they found out the rate and they heard about the upcoming news announcements of Kevin Tan they’re excited and they’re trying to get more shares,” Francisco said.
A special dividend awaits investors, he said.
“If you buy MREIT, in a month there will be a special dividend already . There’s a cash return already for you,” Francisco said.
Francisco noted MREIT’s dominant position in the office space that will allow it to generate multi-year growth.
He said the real estate investment trust of the country’s leading office landlord, Megaworld, has a superior portfolio free of Philippine Offshore Gaming Operators (POGO).
Most of its office properties are Philippine Economic Zone Authority-accredited cyber zones and are occupied by high quality business process outsourcing companies and multinational firms, making MREIT attractive to income hunters.
“Megaworld Group has no POGOs, and MREIT has no POGOs. That’s what differentiates it with the other REITs in the market. Again, they are PEZA-registered and that gives them that unique superior ability,” Francisco said.
Tan, president of MREIT, has committed to boost MREIT’s leasable portfolio to one million square meters in the next five to 10 years in line with its goal to be the country’s largest and fastest growing REIT in Southeast Asia.
Next year, Megaworld is infusing an additional 100,000 square meters of prime office assets to boost its portfolio to around 324,000 sqm by end-2022.
MREITs initial portfolio of 224,431 sqm consists of 10 prime office buildings in three of Megaworld’s most established township locations. These include 1800 Eastwood Avenue, 1880 East Avenue, E-commerce Plaza, One World Square, Two World Square, Three World Square, 8/10 Upper McKinley Building, 18/20 Upper McKinley Building, One Techno Place Iloilo, Richmonde Tower and Richmonde Hotel Iloilo.
“We only see this as the beginning of a very long growth runway. We thank investors for their trust and confidence in supporting our IPO. We are excited about the opportunity to grow and create value for our sponsor, our investors and for the country”, said Tan.