MANILA — AREIT Inc., the real estate investment trust sponsored by Ayala Land Inc., is set to expand its portfolio after shareholders approved the infusion of six commercial properties valued at ₱17.3 billion.
The transaction will increase AREIT’s assets under management to about ₱177 billion from ₱159 billion once the required regulatory approvals are secured.
Under the property-for-share transaction, Ayala Land and several subsidiaries will subscribe to 462.48 million new AREIT common shares at ₱37.48 per share. The shares will be issued in exchange for the six properties rather than through a cash purchase.
The assets being transferred are Glorietta 4 and Ayala Malls Circuit in Makati, Ayala Malls Capitol Central in Bacolod, Ayala Malls Cloverleaf in Quezon City, New World Hotel in Makati and Seda Vertis North in Quezon City.
The deal will significantly increase AREIT’s exposure to retail and hospitality. After the transaction, offices are expected to account for 55% of the portfolio, while retail will represent 33%, hotels 8% and land 4%. Retail and hospitality combined will therefore account for 41% of AREIT’s assets, their largest combined share in the company’s history.
The four malls will use direct lease arrangements, while the two hotels will operate under hybrid master leases combining fixed rent with a variable component linked to hotel revenues. This structure gives AREIT exposure to the operating performance of the properties in addition to its base rental income.
AREIT President and CEO Alberto de Larrazabal said the infusion will broaden the company’s portfolio across offices, retail and hospitality while strengthening its recurring income base.
The properties were independently appraised by Asian Appraisal, while FTI Consulting provided a third-party fairness opinion supporting the transaction valuation and exchange price.
With shareholder approval now secured, the transaction must still undergo regulatory review by the Securities and Exchange Commission. Income from the six properties and the corresponding issuance of shares will take effect once the required approval is obtained.
The expansion marks another major step in AREIT’s portfolio growth, with the company becoming less concentrated in office properties as malls and hotels take a larger role.
The bigger question now is how quickly the expanded portfolio can translate its larger scale and broader property mix into recurring income and future shareholder returns.
