MREIT Inc., the real estate investment trust sponsored by Megaworld Corporation, is looking to grow its portfolio to 500,000 square meters in gross leasable are (GLA) by the end of 2024 by acquiring various assets from its sponsor as well as other developers.
In a disclosure to the Philippine Stock Exchange, MREIT said its currently has a 280,175 sqm in its portfolio and this should grow to almost 325,000 sqm upon conclusion of the property-for-share swap announced in April 4, 2022.
MREIT said it also aims to diversify its portfolio by investing in other townships and other real estate properties.
“As opportunity arises, the Company may choose to diversify to other high-growth geographic areas like Cebu, Bacolod, and Pampanga, and other growth areas in the country where the Sponsor’s townships are located,” the firm said.
It added that, “Diversification plans include investment in other types of real estate properties, to include industrial, logistics, warehouse, other real property sectors that meet the Company’s investment criteria for Grade A, centrally-located, stably occupied, and income producing properties.”
MREIT said it to achieve portfolio growth through the acquisition of quality income-producing properties that fit within the Company’s investment strategy to enhance total return for Shareholders and increase potential opportunities for future income and capital growth.
Thus, the firm said it will consider appropriate real estate opportunities in other high-growth areas where Megaworld is located, other types of real estate properties, and also opportunities from sources aside from Megaworld.
For its acquisitions, MREIT said the potential property should be located in a prime location in either Metro Manila, key provinces in the Philippines, or other attractive locations, as opportunities arise.
The potential property should be primarily (but not exclusively) focused on Grade A office and retail properties, but may be related to other types of real estate properties, including residential, hospitality, industrial, etc., available in the market.
It should also have stable occupancy, tenancy, and income operations. Target tenants would be reputable captive business process outsourcing firms with track record of operations.
The investment opportunity and the structure and pricing of the transaction should provide attractive dividend growth or yield accretion to its shareholders.
MREIT said its acquisitions will be funded either through debt or equity or a combination the two.
The company currently carries minimal debt at 12.4 percent of deposited properties, well below the aggregate leverage limit of 35 percent which may be further increased to 70 percent for REIT companies that have a publicly disclosed investment grade credit rating by a duly accredited or internationally recognized rating agency.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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