MREIT, Inc., the REIT company of township developer Megaworld, is finalizing the acquisition of four prime, grade A, PEZA-accredited properties by December of this year.
Subject to final approvals, the company is looking to acquire Two Techno Place, Three Techno Place, and One Global Center, which are located in Iloilo Business Park; as well as World Finance Plaza in McKinley Hill in Fort Bonifacio, Taguig.
The four prime office properties have a combined GLA of 55,700 square meters and have an average occupancy rate of 99%.
Given that MREIT currently has no bank debt on its balance sheet, the acquisition will be funded through new borrowings in order to further enhance returns.
Once completed, the infusion will increase MREIT’s portfolio gross leasable area (GLA) by 25% from 224,431 square meters to 280,131 square meters.
Additionally, MREIT’s management will ensure that the acquisition will be closed under such terms that will result in enhanced value for its shareholders.
“We remain steadfast in our vision of making MREIT one of the largest office REITs not only in the Philippines, but in the Southeast Asian region as well, and this acquisition is but the first step to realizing the significant growth potential of the company. We look to close the deal by December of this year and expect that these assets will start to contribute revenues to MREIT starting January 2022,” said MREIT president and CEO Kevin Andrew L. Tan.
Earlier, the company revealed its plan to infuse around 100,000 square meters of additional office GLA, equivalent to roughly 45% of the company’s total portfolio, before the end of 2022. This transaction represents the first wave of acquisitions to meet this target.
The properties benefit from a very stable tenant base which are primarily composed of BPOs. This includes renowned companies such as Transcom, WNS, and Nearsol. The buildings are also located in very prime locations.
Even during the pandemic, demand for office space in IloIlo Business Park and McKinley Hill remained high, particularly from BPO locators. These help ensure stability of income generation as well as provide good organic growth for MREIT.
“The quality of growth is also important to us. That is why we are very deliberate in choosing which properties to acquire. This way, we not only ensure the sustainability of our income generation, but also provide a clear path towards capital appreciation,” Tan added.