The Philippine Stock Exchange has approved the initial public offering (IPO) of as much as P15.1 billion planned by property giant Ayala Land-sponsored AREIT Inc., which will be the first real estate investment trust (REIT) to come to the local market.
“We are set to witness a milestone in the capital market with the first REIT IPO. We are excited over the prospects of the REIT sector now that we have a first mover in REIT listing,” PSE president and chief executive officer Ramon Monzon said in a press statement on Saturday.
AREIT will offer a total of 502.57 million shares, inclusive of the over-allotment option of around 45.69 million, at an indicative price of up to P30.05 per share.
The primary offering consists of 47.86 million new common shares while 409.02 million secondary shares will also be offered.
The final offer price will be determined on July 22 after the company’s book building process.
AREIT’s offering will run from July 27 to August 3 while listing is slated for August 13.
“We are pleased that AREIT has decided to pursue its IPO even under the present economic challenges brought about by the (coronavirus) COVID-19 pandemic. We are optimistic that the company’s IPO will pave the way for other property firms, even those that are not yet listed in the PSE, to consider listing REITs,” Monzon added.
REIT is a corporation that primarily invests in income-generating real estate such as office space, shopping malls, serviced apartments, and even hotels, hospitals, infrastructure and warehouses. It gives investors an opportunity to invest directly in the finished projects rather than the developer itself. Developers, on the other hand, can use this structure to recycle capital for other projects.
AREIT’s property portfolio consists of three office and commercial buildings, excluding the land on which they stand: Solaris One, Ayala North Exchange and McKinley Exchange.