The Securities and Exchange Commission (SEC) has considered favorably the initial public offerings (IPO) of real estate investment trusts (REIT) sponsored by Robinsons Land Corporation (RLC) and Megaworld Corporation.
In its meeting on August 3, the Commission En Banc resolved to render effective the registration statements of RL Commercial REIT, Inc. and MREIT, Inc. covering shares for public offering for as much as P26.7 billion and P27.3 billion, respectively, subject to their compliance with certain remaining requirements.
A REIT is a stock corporation established principally for the purpose of owning income-generating real estate assets such as apartment buildings, office buildings, medical facilities, hospitals, hotels, resorts, highways, warehouses, shopping centers, railroads, among others. It is a type of investment instrument that provides a return to investors derived from rental income of the underlying real estate asset.
RL Commercial REIT and MREIT will follow the market debut of AREIT, Inc. of Ayala Land, Inc. and DDMP REIT, Inc. of DoubleDragon Properties Corporation in August 2020 and in March 2021, respectively, as well as the ongoing REIT offering of Filinvest Land, Inc.’s Filinvest REIT, Corp.
RL COMMERCIAL REIT
RL Commercial REIT’s registration statement covers 9,948,997,197 common shares for listing on the Main Board of the Philippine Stock Exchange (PSE). It will offer up to 3,342,864,000 secondary common shares at a price of up to P7.31 per share, with an overallotment option of up to 305,103,000 common shares.
The offer shares are currently held by RLC, which could generate up to P25.88 billion in net proceeds should the overallotment be fully exercised.
New investors will corner 36.67% of RL Commercial REIT’s issued and outstanding common shares, while existing shareholders will retain the remaining 63.33%, should the company exercise the oversubscription option.
RL Commercial REIT will conduct the IPO from August 31 to September 8 and list on the PSE on September 20, based on the latest timetable submitted to the SEC.
The company engaged BPI Capital Corporation and UBS AG, Singapore Branch as joint global coordinators, lead managers, and joint bookrunners for the offer.
UBS will serve as lead international bookrunner, while BofA Securities and CLSA will also act as international bookrunners.
BPI Capital will likewise serve as lead local underwriter, with China Bank Capital Corporation as local underwriter.
RL Commercial REIT’s portfolio includes 14 commercial real estate assets with an aggregate gross leasable area (GLA) of 425,315 square meters (sq.m.) Its commercial spaces are primarily leased for office purposes, which may be transformed into retail spaces as required.
The RLC-sponsored REIT tapped RL Fund Management, Inc. and RL Property Management, Inc. as property manager and fund manager, respectively.
MREIT’s registration statement covers 2,532,121,381 common shares for listing on the Main Board of the PSE.
For public offering are 1,078,000,000 secondary offer shares priced at up to P22 per share, with an overallotment option of up to 161,700,000 common shares. The offer shares are currently owned by Megaworld.
Should the overallotment option be fully exercised, the public offering could generate up to P26.3 billion in net proceeds for Megaworld.
The IPO is expected to run from August 23 to 27 in time for the REIT’s listing on the PSE on September 6, based on the latest timetable submitted to the SEC.
Assuming the full exercise of the overallotment option, MREIT will have a public float of 49% post-IPO.
BDO Capital & Investment Corporation, Credit Suisse (Singapore) Limited, UBS AG Singapore Branch, and DBS Bank Ltd. have been tapped as joint global coordinators and bookrunners for the offer.
Credit Suisse, UBS, DBS, and CLSA will also serve as international bookrunners, and BDO Capital as domestic lead underwriter.
MREIT also engaged First Metro Investment Corporation, Investment & Capital Corporation of the Philippines, RCBC Capital Corporation, and SB Capital Investment Corporation as domestic co-lead underwriters.
MREIT Fund Managers, Inc. and MREIT Property Managers, Inc. will serve as fund manager and property manager, respectively, for the REIT.
MREIT’s initial portfolio covers an aggregate GLA of 224,430.8 sq.m. across 10 properties, with an aggregate appraised value of about P49.32 billion. Its properties are spread out across Metro Manila, primarily in Taguig City and Quezon City, as well as in Iloilo City.
Proceeds from the offerings of RL Commercial REIT and MREIT shall be reinvested in the Philippines, pursuant to the Revised Implementing Rules and Regulations of Republic Act No. 9856, or the Real Estate Investment Trust (REIT) Act of 2009, issued in January 2020.
As mandated by law, both companies shall also distribute to shareholders at least 90% of their annual distributable income as dividends.
The distributable income refers to the company’s net income as adjusted for unrealized gains and losses/expenses and impairment losses, and other items in accordance with internationally accepted accounting standards. It excludes proceeds from the sale of the REIT’s assets that are reinvested in the REIT within one year from the date of the sale.