AREIT acquiring P19.5 billion mall assets from Ayala Land

MANILA, Philippines — AREIT Inc., the listed real estate investment trust of the Ayala Group, is acquiring two commercial mall properties located in Metro Manila and Cebu worth P19.5 billion from its sponsor Ayala Land Inc. (ALI) through a property-for-share swap transaction.

ALI and its wholly owned subsidiary Summerhill Commercial Ventures Corp. will subscribe to 441.13 million primary common shares of AREIT in exchange for Ayala Center Cebu and Ayala Malls Feliz.

The two properties will be exchanged for AREIT shares priced at P44.15 apiece.

The transaction is the sixth property-for-share swap by AREIT with ALI.

“This latest infusion strengthens AREIT’s portfolio with two dynamic retail destinations, enhancing both our geographic reach and asset mix. As we continue to build scale with quality, our shareholders will benefit from a larger and more diversified portfolio,” AREIT president and CEO Alberto de Larrazabal said.

Ayala Center Cebu is a flagship mall located in Cebu Business Park, Cebu City, while Ayala Malls Feliz is located along Amang Rodriguez Avenue in Pasig City.

The planned infusions of ALI and Summerhill will bring AREIT’s assets under management to P158 billion.

The assets have a combined building gross leasable area (GLA) of 375 thousand square meters and will bring AREIT’s total GLA to 4.7 billion square meters, composed of 1.8 million-square meter building GLA and 2.9 million-square meter industrial land GLA.

Across the 1.8 million-square meter of building GLA, offices will account for 40 percent post-transaction, while retail will increase to 54 percent and hotels will comprise six percent.

The mix enhances AREIT’s retail exposure and broadens its footprint across Metro Manila and Cebu.

AREIT said  the transaction, which will be subject to the approval of the company’s shareholders at a special stockholders’ meeting on Dec. 11 and pertinent regulatory bodies thereafter, is targeted for completion by the second half of 2026.

As sponsor, ALI’s objective is to grow the asset base of AREIT through the infusion of several high quality assets.

AREIT said that consistent with prior transactions, the latest infusion is expected to support dividend growth and be yield-accretive.

Once approved, total infusions for the year will reach P40.5 billion, marking AREIT’s largest annual addition to date.

Meanwhile, AREIT’s board has also approved the amendment to its articles of incorporation, subject to stockholders’ approval, to decrease authorized capital stock from P40.5 billion to P39.83 billion through the retirement of its existing 67.33 million treasury shares.

The company will then increase its authorized capital stock from P39.83 billion to P57 billion.

AREIT said the increase in capital stock will enable the company to grow its assets under management through various modes of acquisition, including property-for-share swap.