Real estate giant Ayala Land Inc. (ALI) has raised P5.63 billion from the sale of shares of real estate investment trust AREIT Inc. at P31.10 per share, lower than the P34 per share valuation of its upcoming share swap for P23 billion.
In a disclosure to the Philippine Stock Exchange (PSE), ALI said that together with its wholly-owned subsidiaries AyalaLand Offices Inc. and Glensworth Development Inc., it sold a total of 181 million AREIT shares at a transaction price of P31.10 per share.
The shares came from the property-for-share swap transaction with AREIT and proceeds from the transaction will be used according to ALI’s reinvestment plan as REIT sponsor of AREIT.
ALI tapped BPI Capital Corporation, UBS AG Singapore Branch, and CLSA Limited as Placement Agents and noted that the transaction was upsized by over 40 percent, anchored by high-quality long-only institutional investors from the Philippines and overseas.
The proceeds from the block sale shall be settled on Jan. 30, 2024, under the Placement Agreement. ALI and its subsidiaries will submit the required Reinvestment Plan detailing the use of proceeds obtained from the share sale transaction in due course.
AREIT is acquiring P23 billion worth of prime commercial properties from ALI (ALI) alongside the purchase of the P6.77 billion industrial land from Buendia Christiana Holdings Corporation (BCHC), a wholly-owned subsidiary of ACEN Corporation (ACEN).
ALI’s new asset infusions into AREIT comprises Makati flagship assets, Ayala Triangle Gardens Tower 2 – ALI’s most premium office tower located at the corner of Paseo de Roxas and Makati Avenue, luxury mall Greenbelt 3 and 5 and Holiday Inn and Suites Makati at Ayala Center, as well as Seda Ayala Center Cebu.
ALI and its subsidiaries Greenhaven Property Ventures, Inc. and Cebu Insular Hotel Co., Inc. will subscribe to 642.15 million AREIT primary common shares in exchange for the Makati and Cebu properties valued at P21.8 billion at an exchange price of P34 per share, as validated by a third-party fairness opinion.
In addition to the asset-share swap, AREIT has acquired Seda Lio in El Nido, Palawan, from ALI subsidiary Econorth Resort Ventures, Inc. for P1.19 billion. The acquisition is expected to immediately contribute to AREIT’s income within the first quarter of 2024.
The ALI properties will be acquired with BCHC’s 276-hectare industrial land in Zambales, which will be leased by ACEN’s wholly-owned subsidiary, Giga Ace 8, Inc., for its solar plant operations. It will provide AREIT guaranteed rental income with annual escalations over the next twenty-five years.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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