MREIT considers acquisition of Megaworld Lifestyle Malls

MREIT Inc., the real estate investment trust sponsored by township developer Megaworld Corporation, is considering the expansion of its portfolio from purely office buildings to include malls.

During the firm’s annual stockholders’ meeting, MREIT President and CEO Kevin L. Tan said “we are definitely open to looking at other classes (of assets) as the opportunity arises.”

“In line with the removal of mobility restrictions and improving economic activity, the Megaworld Lifestyle Malls portfolio is definitely looking to be a very attractive diversification opportunity for MREIT,” he noted.

Tan said Megaworld has roughly have about 484,000 square meters of gross leasable area currently in the Megaworld Lifestyle portfolio, which can be potentially injected into MREIT.”

“Tenant sales at Megaworld Lifestyle Malls have already recovered, and they’ve grown, have even grown past pre-pandemic levels. So in line with this, Megaworld Lifestyle Malls has also removed all rental concessions in January 2023,” said Tan.

He said this shows the continued growth of the mall segment and the further upside from rents that are collected as a percent of tenant sales.

For the office segment, Tan said net take up has turned positive for the first time since the pandemic and he believes this will continue to pick up in the coming years and allow the market to fully recover.

“We’d like to note as well that, even during the pandemic, MREIT’s assets remained resilient and maintained high levels of occupancy and retention rate,” he noted.

Tan said “We separate ourselves from peers as MREIT is focused on high quality properties that are situated in prime locations in high growth areas. For instance, we continue to have significant exposure to the Taguig market, especially with our acquisition of McKinley West properties. Our occupancy rates remain elevated vis-a-vis the rest of Metro Manila.”

If you like this article, share it on social media by clicking any of the icons below.

Or in case you haven’t subscribed yet to our newsletter, please click SUBSCRIBE so you won’t miss the daily real estate news updates delivered right to your Inbox.

The article was originally published in Manila Bulletin and written by James A. Loyola.