VistaREIT Inc. (VREIT), the commercial real estate investment trust of integrated property developer Vista Land & Lifescapes Inc., has successfully listed its shares on the Philippine Stock Exchange.
The firm’s share price closed at its initial public offering price of P1.75 per share despite the plunge in the PSE main index.
Still, the listing got a lukewarm reception due to poor sentiment in the local stock market.
“VREIT had a lukewarm reception during its listing and would have finished much higher if not weighed by market sentiment as a whole, with the PSEi (Philippine Stock Exchange Index) already drifting towards oversold territory,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
For Vista Land Chairman Manuel B. Villar Jr. however, they remain “truly excited” to bring VREIT public.
“What we offer is an elevated mall experience coming from our high quality and world-class tenants,” said Villar. He added that, “we believe that Filipinos deserve an experience that is at par with the best of the world and this IPO helps us to do just that.”
“VREIT may be the smallest REIT listing in the PSE so far in terms of the amount of capital raised from a REIT IPO. But when you consider dividend yield, VREIT stands out as a giant,” according to PSE President Ramon S. Monzon.
The firm is offering the highest dividend yield of any REIT so far, an estimated 8.25 percent for this year and 8.99 percent for 2023.
“This is likely the reason why it now counts among its shareholders Local Small Investors from 42 provinces, seven countries and two overseas territories,” said Monzon.
Limlingan observed investors bought up the shares, as the company aims to “maintain high occupancy rates and quality tenants with particular focus on those offering essential goods and/or services.’”
Limlingan said VREIT’s “Weighted Average Lease Expiry (WALE) of 5.09 years is quite impressive while relatively high occupancy rate for malls was at 90 percent as of end-2021 despite the protracted pandemic. Yields are also projected to be one of the highest, with the forecast to reach more than 8 percent this year and around 9 percent next year.”
VREIT is the flagship mall and office REIT of Vista Land. The company has a portfolio of ten community malls and two PEZA-registered office buildings with an aggregate gross leasable area of 256,404 sqm.
Based on its financial records, the Villar-owned community malls posted an increase in rental income in 2020 compared to other mall players despite the challenges brought about by the COVID-19 pandemic.
Officials attributed the community malls’ positive performance to its strategic location and the tenant mix of the malls that were focused on providing majority essential items during the pandemic.
“We aim to be among the leading diversified commercial REITs in the Philippines in terms of portfolio, profitability, growth, sustainability and dividend yield,” said VREIT President and CEO Manuel Paolo A. Villar.
He added that, “We are optimistic about the prospect of a reinvigorated economy due to the easing of the restrictions, VREIT sees a robust foundation, its synergies with Villar-group retail ecosystem.” VREIT is anchoring its solid expansion program on the robust, geographically-diverse pipeline of the profitable assets of Vista Land.
Vista Land’s commercial assets are composed of 31 malls, seven office buildings and 69 commercial centers with a combine Gross Floor Area (GFA) of 1.6-billion. VREIT assets only account for over 20 percent of the total Vista Land’s GFA.
In addition, Vista Land has about 3,000 hectares of raw land, also known now as the Vista Estates. Vista Land has also identified various locations that are suitable for commercial developments in the future.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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