The Go Family’s REIT, RL Commercial REIT [RCR 7.43 0.41%] [link], said that it had “consummated” the acquisition of the P5.9 billion Robinsons Cyberscape Gamma building from its sponsor, Robinsons Land [RLC 19.96 0.60%], for 777.8 million common shares of RCR.
The addition of the new building will bring RCR’s gross leasable area (GLA) up to 480,500 sqm. The Cyberspace Gamma building is over 90% occupied, and will generate a projected dividend yield of 5.64%.
MB BOTTOM-LINE
Growth is good. Doesn’t matter if it comes in big chunks every so often, like with AREIT [AREIT 43.85 0.46%], or in smaller, more frequent drips, like with RCR. Yield-accretive additions to a REIT are what shareholders and investors want to see.
Given the stock price risk that investors assume, I don’t think anyone would be satisfied if a REIT sponsor just created a REIT and then did nothing with it, even if that REIT delivered on the yield projections that it used to sell the opportunity in the first place. Investors want growth. If investors were looking for “set-it-and-forget-it” opportunities, there are plenty of preferred shares offerings that deliver strong dividend returns, or even some bonds (for those with lower risk tolerance) that offer decent returns.
What REIT investors want, in exchange for assuming some risk on price, is growth. Whether it’s building-by-building or batch-by-batch will hardly matter in the long run.
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