Asset infusions boost AREIT profits

AREIT Inc. (AREIT), the real estate trust of property giant Ayala Land Inc. (ALI), reported a 43 percent jump in net income last year to P4.93 billion, boosted by the acquisition of more properties for lease.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said this is excluding the net fair value change in investment properties. 

AREIT’s properties recorded a 97 percent average occupancy at the end of the year, higher than the industry.

Total revenues rose 41 percent to P7.14 billion while Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew 39 percent to P5.04 billion on account of stable operations and consistent asset infusions. 

“Our growth initiatives will benefit AREIT–profoundly enlarging the portfolio further, diversifying the assets, reducing concentration risk, and most importantly, providing our shareholder’s dividend accretion,” said AREIT President and CEO Carol T. Mills.

She noted that “this is a testament that AREIT, led by its sponsor Ayala Land, is an integral vehicle for capital recycling and growth, and we remain steadfast in attaining our vision of being the leading and most diversified Philippine REIT.”

AREIT said its 2023 performance was boosted by the acquisition of One Ayala Avenue East and West Towers at the corner of Ayala Avenue and EDSA, Glorietta 1 and 2 Mall and BPO buildings at Ayala Center, and MarQuee Mall in Angeles, Pampanga.

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This resulted in a four percent increase in dividends per share to P0.55 in the third quarter from P0.53 in the second quarter of the year.

During its Board of Directors meeting today, AREIT declared cash dividends of P0.55 per outstanding common share for the fourth quarter of 2023. The dividends are payable on March 20, 2024, to shareholders on record as of March 4, 2024. 

This latest quarterly dividend brings AREIT’s annual dividend-per-share to P2.15 for 2023, an 8.6 percent increase from P1.98 per share in 2022 nearly double the company’s first quarterly payout of P0.28 per share when it listed in 2020.

Consistent with its thrust to accelerate growth, AREIT secured stockholders’ ratification last Feb. 12, 2024, for the property-for-share swap transaction with ALI, and its subsidiaries, Greenhaven Property Ventures, Inc. and Cebu Insular Hotel Co., Inc., involving Ayala Triangle Tower Two, Greenbelt Mall 3 and 5, Holiday Inn and Suites Makati, and SEDA Ayala Center Cebu, with a value of P21.8 billion.

Also approved was the acquisition of the 276-ha. industrial land located in Zambales owned by Buendia Christiana Holdings Corporation (BCHC), a wholly-owned subsidiary of ACEN Corporation with a value of P6.8 billion. 

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AREIT also completed its cash acquisition of SEDA Lio in El Nido, Palawan, from ALI subsidiary Econorth Resort Ventures, Inc. for P1.19 billion last Jan. 17, 2024.

The planned infusions will bring AREIT’s Assets under Management (AUM) to P117 billion, quadruple the size from the IPO. This is in line with AREIT’s objectives to significantly expand and diversify its portfolio to capitalize on various growth opportunities across the real estate sector. 

AREIT will execute the Deed of Exchange with ALI, its subsidiaries, and BCHC and apply for its approval with the SEC by March 2024. The new shares will be issued, and the income from the assets shall accrue to AREIT upon approval.

On Jan. 30, 2024, AREIT received EDGE Zero Carbon Certification for eight office buildings comprising 354,000 square meters, making Ayala Land and AREIT’s offices the largest EDGE Zero Carbon certified portfolio in the Philippines.

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

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