AREIT To Pursue ₱22.5-B Prime Asset Infusion In 2023

AREIT, Inc. is targeting this year to infuse assets worth P22.5 billion, which its top official expects to bring the total assets of Ayala Land, Inc.’s real estate investment trust (REIT) to P87 billion.

Photo Insert: The assets falling under the infusion are One Ayala Avenue, Glorietta 1 and 2 mall and office buildings, and Ayala Malls’ MarQuee in Angeles, Pampanga.

“We look forward to 2023 being another banner year for AREIT as it turns three since its listing as a first Philippine REIT,” president and chief executive officer (CEO), Carol T. Mills said at the company’s annual stockholders meeting.

He added: “The company will be undertaking its largest asset infusion, bringing total assets to P87 billion, triple our portfolio of P30 billion when we did the IPO (initial public offering).”

Ms. Mills said the infusion is set to put AREIT way ahead of its investment plan of reaching P90 billion in assets in three years. “This planned infusion of assets involves some of the prime flagship developments from our sponsor Ayala Land, setting AREIT as the latter’s commercial REIT platform,” Ms. Mills said.

The assets are One Ayala Avenue, Glorietta 1 and 2 mall and office buildings, and Ayala Malls’ MarQuee in Angeles, Pampanga. One Ayala Avenue’s east and west office towers has 71,000 square meters that were substantially leased during the pandemic, Ms. Mills said.

She said the P22.5-billion asset infusion will benefit the company in three ways: expansion of its portfolio, diversification of its asset base, and shareholder return. “A diversified portfolio can reduce several risk exposures for AREIT. Diversification minimizes sector risk and balances are predominantly office-based portfolio with retail,” she said.

“It [also] mitigates tenant concentration risk, as we will have a larger and more diversified tenant base, reducing the impact of any third-party tenant leaving the portfolio,” she added.

After the infusion, the malls and offices in AREIT’s portfolio will comprise 10% and 42% of Ayala Land’s total malls and offices, respectively. “As such, we still have significant room for growth. Our goal is to ensure that AREIT is not only large enough in size today but also has a healthy pipeline for future growth,” Ms. Mills said.

She added that the company is also open to third-party acquisitions as long as “the assets are prime, stable, and can add to AREIT’s dividends.”

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