AREIT’s total revenue base from its two assets, Solaris and Ayala North Exchange, was P1.5 billion in 2019, which generated recurring net income of P937 million. The three properties, whose land is leased from ALI, have a total gross leasable area of 152,755.6 square meters with an average occupancy level of 99.9 percent. Here are the top five things every investor needs to know about AREIT’s IPO: Previously known as One Dela Rosa Development, AREIT is a property company organized as a real estate investment trust (REIT) that invests and manages a portfolio of income-generating assets with the purpose of producing stable returns to investors. The board of AREIT Inc., the Ayala Land-led real estate investment trust (REIT), has approved the acquisition of a commercial development called The 30th in Pasig. AREIT will be the first real estate investment trust (REIT) in the country after the Implementing Rules and Regulations (IRR) of the REIT Law of 2009 were approved by regulators last year. 25 Filipino Bold Movies With The Weirdest Titles, This New Residential Development is for Filipino Futurists, Let’s Talk Strategy: DigiCon 2020 Is Helping Businesses Navigate The ‘Post-Digital’ Age, Anting-Anting and the Revolution in the Visayas, Big Businesses Must Invest in Disaster Risk Reduction, Says SM’s Hans Sy. The capital appreciation potential of AREIT will depend on how it will grow its dividends by expanding its investment portfolio in the future. How to Make Blood Moon Punch, the Halloween Cocktail That Embraces Absurdity, What kind of gifts to get children for Kwanzaa, Pristine 'fireball’ meteorite contains extraterrestrial organic compounds, IBP concerned over quarantine violators detained longer than necessary. Malaysian PM's key ally demands early polls in new snag, The One Vitamin Doctors Are Urging Everyone To Take Right Now, I Tried The Most Popular Items At Whataburger—The Texas Version Of In-N-Out. AREIT can also sell its 67 million treasury shares to raise funds. The 30th also has a retail podium operated by Ayala Land, which it will lease from AREIT. The first tower is a 30-storey building, consisting of a 12-storey HQ office and 18-storey serviced apartments, while the second tower is a 20-storey BPO office designed for 24/7 operations. The offering period of AREIT shares will run from July 27 to August 3 with a target listing date on August 13, 2020 and market capitalization of P27.7 billion. AREIT owns three commercial buildings in Makati, the country’s main financial hub in the capital. Prior to the AREIT listing date, AREIT sponsor – Ayala Land, Inc. disclosed to the Philippine Stock Exchanged that the AREIT IPO was oversubscribed by twice the base offer, with “high-quality” domestic and international institutional investors participating in the book-building notwithstanding the continuing coronavirus (COVID19) pandemic. Incorporated by AyalaLand Offices in 2006, AREIT became 90.15 percent owned by Ayala Land (PSE: ALI) in 2018 when it transferred two properties, namely, Solaris One Building and Ayala North Exchange worth P6.9 billion, in exchange for new shares. Right after the IPO, AREIT plans to expand its portfolio by acquiring a fourth property located in Cebu IT park with a gross leasable area of 17,947.9 square meters for P1.45 billion. The said mall was transferred to AREIT from Ayala Land for the purchase price of P5.1 billion, inclusive of value added tax. AREIT will sell up to 502 million shares, consisting mainly of secondary shares from its parent company, Ayala Land, to the public at a price of P27 per share. Known as Teleperformance Cebu, this property is a grade A, PEZA-accredited mixed-use development that consists of two BPO office towers completed in 2010. The 30th is a 76,000 square meter prime commercial development along Meralco Avenue in Pasig. The 30th also has a retail podium operated by Ayala Land, which it will lease from AREIT. “As AREIT intends to fully fund this acquisition through debt, this will have an accretive effect and increase AREIT’s projected dividends,” it said. REITs can also offer competitive dividend yields against preferred stocks because of its ability to expand and grow its income base, resulting to long-term share price appreciation. AREIT’s three properties, which are all grade A and PEZA accredited, are managed by ALI through its wholly owned subsidiaries, AREIT Fund Managers and AREIT Property Managers. Broken People novelist Sam Lansky wonders, What if you could fix all your faults in 3 days? Without acquisitions, the main source of revenue growth will be AREIT’s annual rental increases. Nevertheless, AREIT’s lower dividend yield does not necessarily mean that the stock is not good. The board of AREIT Inc., the Ayala Land-led real estate investment trust (REIT), has approved the acquisition of a commercial development called The 30th in Pasig. The total return of investment in REIT is composed of a dividend yield and capital return. Atits IPO price of P27 per share, this will give a gross dividend yield of only 3.9 percent. 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(IMI) said it posted a net loss of $11.9 million in January to September, much deeper than last year’s loss of $4.03 million, but the company said its performance will soon improve as its operations are returning to normal. The weighted average rental escalation rate of AREIT’s properties is about 3.9 percent per year. For example, for Solaris One, AREIT pays seven percent based on gross rental income. AREIT’s latest acquisition, The McKinley Exchange, is a five-storey commercial office leasing that was completed in 2015. “We continue to listen to our passengers so we may also continuously review and improve our processes to better address everyjuan’s concerns. 9856, or the Real Estate Investment Trust Act of 2009 last January 20, 2020. The Ayala Land trust covers three properties in Makati, namely Solaris One, Ayala North Exchange, and McKinley Exchange. AREIT Portfolio. Save my name, email, and website in this browser for the next time I comment. Deck the Halls, Because Freeform's 25 Days of Christmas Schedule Is Here! Buying the stock for competitive yield and long-term capital returns can be a good defensive investment strategy to navigate this crisis. The acquisition of The 30th will increase AREIT’s portfolio of assets to 246,000 square meters of gross leasable area from 170,000 square meters. Email Henry for business advice [email protected] or follow him on Twitter @henryong888. But according to AREIT, the company plans to follow the Adjusted Funds from Operations (AFFO) approach wherein the reported net income shall add back its depreciation expenses and deduct any capital expenditures and rental adjustments. By the end of the year, AREIT will have a total gross leasable area of 170,703.7 square meters with BPO operations occupying 66 percent of its total spaces, followed by service apartments, 15 percent; HQ offices, 12 percent; and others, seven percent. Here’s Why. This year, with the acquisition of McKinley Exchange and later in the year, Teleperformance Cebu, AREIT is projecting that its net income will grow by 30 percent at P1.22 billion. Learn how your comment data is processed. AREIT, Inc., Ayala Land’s real estate investment trust company, dived by 7.78 percent at ₱24.90 per share from its Initial Public Offering (IPO) price of ₱27.00 as of closing on Thursday, August 13, 2020. AREIT’s board has also approved initiatives to raise up to P6.4 billion to finance future asset acquisitions. Under the new law, a REIT company is required to distribute at least 90 percent of its distributable income as dividends. These properties cover a total gross leasable area of about 153,000 square meters and have a total occupancy rate of 99.9 percent. The development was completed in 2017 and the office is fully occupied predominantly by business process outsourcing firms. AREIT can potentially tap two sources of financing. Based on AREIT’s projections, the total distributable income that they can declare for 2020 shall be P1.35 billion or P1.31 per share, which represents 111 percent payout ratio from the forecasted net income. Following the same approach, the projected distributable income per share for 2021 is P1.58 per share, which gives a gross dividend yield of 5.9 percent or 5.31 percent net of taxes. The total turnover value capped the day at nearly ₱832.50 million and a block sale worth nearly P12.3 billion. Some REITs may be riskier than the others because they have less predictable income stream due to their asset quality or financial condition. At minimum rental yield of 9.5 percent, new acquisitions can generate additional P191 million in rental revenues, which should enhance AREIT investment returns. “We are very excited with the growth prospects for AREIT, starting with the recently acquired Cebu building and now with another acquisition of a prime commercial development in Pasig City. This site uses Akismet to reduce spam. Top Story: 25 Filipino Bold Movies With The Weirdest Titles. Together, the three income-generating properties, which now comprise the assets of AREIT, are now valued at P27.7 billion based on the IPO price. This price target is still 3.9 percent lower than the net asset value of AREIT, which is computed at P33.51 per share as of first quarter of this year. [7 February 2020] Ayala Land, Inc.’s (ALI) subsidiary, AREIT, Inc., filed its application for a Real Estate Investment Trust (REIT) offering to the Securities and Exchange Commission (SEC), following the release of the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. AREIT also pays its land leases to ALI based on gross rental income, enabling the company to enjoy flexible operating leverage. Revenues were down 16 percent to... Budget carrier Cebu Pacific said it extended the coverage of its flexible booking options for passengers traveling until December 31. The board of AREIT Inc., the Ayala Land-led real estate investment trust (REIT), has approved the acquisition of a commercial development called The … The board of AREIT Inc., the Ayala Land-led real estate investment trust (REIT), has approved the acquisition of a commercial development called The 30th in Pasig. One is by debt financing and the other is through the sale of its treasury shares. If you are planning to buy AREIT stocks, you need to understand the business of the company.