Areit Inc. on Wednesday said it will conduct its sixth property-for-share swap with its sponsor, Ayala Land Inc., involving the acquisition of two shopping malls in Metro Manila and Cebu.
The company said its board approved a property-for-share swap transaction with Ayala Land and its wholly-owned subsidiary, Summerhill Commercial Ventures Corp.
Ayala Land and Summerhill will subscribe to 441.13 million primary common shares of Areit in exchange for Ayala Center Cebu, a flagship mall located in Cebu Business Park in Cebu City; and Ayala Malls Feliz along Amang Rodriguez Avenue in Pasig.
The aggregate value of the two properties stands at P19.5 billion and will be exchanged for Areit shares priced at P44.15 per share, as validated by a third-party fairness opinion.
Areit shares closed on Wednesday at P43 apiece and Ayala Land at P20.25 apiece.
The planned infusions will bring Areit’s assets under management to P158 billion.
These assets have a combined building gross leasable area (GLA) of 375,000 square meters, and will bring Areit’s’s total GLA to 4.7 million square meters, composed of 1.8 million square meter building GLA and 2.9 million square meter of industrial land GLA.
Post-transaction, across the 1.8 million square meter of building GLA, offices will account for 40 percent, retail will increase to 54 percent and hotels will comprise 6 percent.
This improved mix enhances Areit’s retail exposure and broadens its footprint across Metro Manila and Cebu, the company said.
The transaction shall be subject to the approval of Areit shareholders during a special meeting set on December 11.
The companies target to complete the transaction by the second half next year. When approved, total infusions for the year will reach P40.5 billion, marking Areit’s largest annual addition to date.
Consistent with prior transactions, this latest infusion is expected to support dividend growth and be yield-accretive, the company said.
‘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 M. de Larrazabal said.