MREIT, Inc. closed higher on its market debut on Friday, after completing its P15.3 billion initial public offering (IPO).
MREIT, the real estate investment trust (REIT) sponsored by Megaworld Corp., is the fourth REIT to list at the stock exchange this year. It is also the second largest REIT offering so far.
MREIT closed at P16.70 apiece, 3.73% higher than its P16.10 listing price on its first day at the Philippine Stock Exchange (PSE).
“MREIT closed higher during its first day of trading, ascending to as high as P17.16 in the morning,” Timson Securities, Inc. Trader Darren Blaine T. Pangan said in a Viber message.
“[It eventually moved] sideways around the P17.00 area before experiencing some profit-taking activity to finally settle at P16.70,” said Mr. Pangan, adding that the issue ended up being the second most actively traded stock on Friday.
“MREIT closed higher on its first trading day, after the discount in its IPO (initial public offering) price and relatively higher dividend yield proposition,” Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said in a separate Viber message.
For 2022, MREIT’s projected dividend yield is at 5.65% and it is expected to bump up to around 6.1% in 2023.
MREIT sold 949.8 million shares, which included the overallotment option, at P16.10 apiece.
“MREIT is instrumental to efficient capital recycling, capturing and unlocking the value of investments in Megaworld’s prime properties and funneling that into the development of new projects,” MREIT President and Chief Executive Officer Kevin Andrew L. Tan said in his speech on Friday.
MREIT aims to be the “fastest-growing REIT” in the country and it seeks to be one of the largest in Southeast Asia in terms of floor area.
It currently has 10 office assets in its initial portfolio spanning 224,431 square meters (sq.m.). These assets are located in three of its townships: Eastwood City in Quezon City, Bonifacio Global City’s (BGC) McKinley Hill, and Iloilo Business Park in Mandurriao, Iloilo City.
“We are committed to continually injecting existing stable assets from [Megaworld’s] vast portfolio into MREIT, which further accelerates the growth of the company,” said Mr. Tan, who is also the chief strategy officer of Megaworld.
Mr. Tan said around 100,000 sq.m. more of Megaworld’s office assets from Eastwood City, McKinley Hill, and Iloilo Business Park are expected to be infused into MREIT by the end of 2022.
Office and commercial spaces from Uptown Bonifacio in BGC are also planned to be injected by 2023.
“With BGC having the highest office rental rates among major business districts in the country, these fresh assets can truly bulk up MREIT’s portfolio, increase its rental revenues, and of course, grow the distribution yields for our investors,” Mr. Tan said in a statement on Friday.
Uptown Bonifacio’s new tower, Worldwide Plaza, is nearly completed.
“Once all of the seven office towers in Uptown Bonifacio are completed, the township will have the biggest office portfolio among our 27 township developments,” said Mr. Tan. “We look forward to having some of these assets become part of MREIT.”