New earnings stream for AREIT as SEC approves P11.2B asset swap with ALI

The Securities and Exchange Commission (SEC) has approved the P11.26 billion asset swap deal between real investment trust pioneer AREIT Inc. and its controlling shareholder Ayala Land (ALI).

In a disclosure to the Philippine Stock Exchange, AREIT said it would issue 252.14 million shares to ALI in exchange for commercial properties in Cebu valued at P11.26 billion.

The new assets are expected to contribute to earnings of the company starting fourth quarter of 2022.

AREIT will apply for the Bureau of Internal Revenue certificate authorizing registration for the new assets and listing the shares in favor of ALI within the first quarter.

The transaction will boost AREIT’s gross leasable area to 673,000 square meters.

At the closing price of P35.70 on January 17, AREIT’s total market capitalization stood at P63 billion or more than double since its listing in 2020.

AREIT plans to diversify into shopping malls as part of its target to acquire assets worth a total of P30 billion to P45 billion over the next three years.

It plans to continue to grow its asset portfolio by an average of 100,000 sqm of gross leasable area every year from 2023 to 2025.

AREIT said this would expand its assets under management (AUM) at approximately P10 billion to P15 billion annually.

To date, the company has P53 billion in AUM. Post infusion of the Cebu assets, it had projected AUM to reach P64 billion upon approval of the asset swap.

AREIT also plans to diversify its asset portfolio in terms of sector, location and income contribution.

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