MREIT eyes infusion of P20 billion office assets

MANILA, Philippines — MREIT Inc., the real estate investment trust (REIT) of Andrew Tan-led Megaworld, will infuse P20 billion worth of new office assets into its portfolio.

MREIT president and CEO Kevin Tan said the company is looking to surpass its target for 2022 in terms of asset injection.

“We earlier announced an additional 44,300 square meters by end of the year, but we are working to further bulk it up with more assets as we continuously look for ways to increase dividend yields for our shareholders,” Tan said.

These new assets may include some of built-to-suit properties, which are considered superior in both quality and lease tenure. These new properties have a multinational tenant base, which include large financial, healthcare, technology, and consulting firms, he added.

The P20 billion acquisition would increase MREIT’s portfolio value by 34 percent to P78.5-billion by end-2022 from the current P58.5-billion.

These properties will come from various Megaworld townships across the country.

In December last year, MREIT completed the acquisition of four commercial properties with a total gross leasable area (GLA) of 55,700 sqm at the cost of P9.1-billion.

By the end of 2021, MREIT’s expanded portfolio already consisted of 14 prime, grade A buildings with a total GLA of around 280,000 sqm located in PEZA-accredited zones in the sponsor’s townships of Eastwood City, McKinley Hill, and Iloilo Business Park.

Tan said the company is looking at several properties for potential acquisition, not just in the three Megaworld townships but also in two more new Megaworld townships.

“We are very optimistic of our very long growth runway considering that Megaworld is building more offices and even launched new townships last year,” he said, adding that the current business conditions are conducive to the attainment of our growth plans.

Various properties will be infused throughout the year with funding expected to come primarily from equity and potentially some debt. Currently, MREIT’s percentage of debt versus total deposited properties is at around 12 percent, well below the 35 percent cap set in the REIT Law.

“There are still a number of items that we have to finalize, and as everyone knows, we have to go through the process as set under the REIT Law. But our objective for the year is to deliver on this enhanced investment plan and ensure the sustained growth of the company,” Tan said.

MREIT is targeting to be one of the largest REITs in Southeast Asia with a target portfolio GLA of 500,000 sqm in 2024 and increase this further to one-million sqm before the end in of the decade.

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The article was originally published in Phil Star Global and written by Iris Gonzales.