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Investment, Financial, REITs
MREIT Expands Portfolio with 4 Prime Assets in a Game-Changing Acquisition
MREIT to acquire 4 prime assets
MREIT Inc., the real estate investment trust (REIT) company of township developer Megaworld, is finalizing the acquisition of four grade A, Philippine Economic Zone Authority-accredited properties by December 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 gross leasable area (GLA) of 55,700 square meters and have an average occupancy rate of 99 percent. Given that MREIT currently has no bank debt on its balance sheet, the acquisition will be funded through borrowings. Once completed, the infusion will increase MREIT’s portfolio GLA by 25 percent to 280,131 sqms from 224,431 sqms.
MREIT’s management vows to 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,” says MREIT president and CEO Kevin Andrew Tan.
Tan said they were expecting to close the deal by December this year and that these assets would start to contribute revenues to MREIT starting January 2022. Earlier, the company revealed its plan to infuse about 100,000 sqms of additional office GLA, equivalent to roughly 45 percent of the company’s total portfolio, before the end of 2022. The transaction involving the four prime properties represents the first wave of acquisitions to meet this target.
The properties benefit from a very stable tenant base which is composed mainly of business process outsourcing firms or BPOs. These include renowned companies such as Transcom, WNS and Nearsol.
Even during the pandemic, demand for office space, particularly from BPO locators, in Iloilo Business Park and McKinley Hill remained high. This helped ensure the stability of income generation as well as provide good organic growth for MREIT.
The 4 Prime Assets Set for Acquisition
The highly anticipated acquisition includes the following strategically located properties:
- Two Techno Place (Iloilo Business Park)
- Three Techno Place (Iloilo Business Park)
- One Global Center (Iloilo Business Park)
- World Finance Plaza (McKinley Hill, Fort Bonifacio, Taguig)
These office spaces have a combined gross leasable area (GLA) of 55,700 square meters and boast an impressive occupancy rate of 99%. Given MREIT’s strong financial position, the company plans to fund the acquisition through borrowings, as it currently holds zero bank debt.
How This Acquisition Strengthens MREIT’s Market Standing
With this infusion, MREIT’s total GLA will surge by 25%, bringing its portfolio to 280,131 square meters from the current 224,431 square meters. This strategic growth underscores the company’s commitment to becoming one of the largest office REITs in Southeast Asia.
“We remain steadfast in our vision of making MREIT a major force in the REIT sector, not only in the Philippines but across Southeast Asia. This acquisition is just the first step toward realizing our company’s immense growth potential,” said MREIT President and CEO Kevin Andrew Tan.
What This Means for Shareholders and Investors
MREIT has assured its investors that this acquisition will be executed under terms that maximize shareholder value. By expanding its asset base, the company aims to:
- Boost rental income and overall revenue
- Strengthen long-term financial stability
- Enhance dividends for its investors
Moreover, these newly acquired properties will begin contributing revenue by January 2022, making an immediate impact on the company’s bottom line.
MREIT’s Future Growth Plans
Beyond this acquisition, MREIT is targeting 100,000 square meters of additional office GLA by the end of 2022—a 45% increase in its current portfolio. The latest transaction represents just the first wave of acquisitions aimed at reaching this ambitious goal.
Why These Properties Are in High Demand
The office spaces within Iloilo Business Park and McKinley Hill have remained highly attractive to tenants, particularly in the business process outsourcing (BPO) industry. Key tenants include:
- Transcom
- WNS
- Nearsol
Despite the challenges brought by the COVID-19 pandemic, demand for office space in these locations has remained robust, proving their resilience and long-term investment appeal.
Final Thoughts: A Bold Step Forward for MREIT
This acquisition signals a transformational phase for MREIT, solidifying its position as a major player in the REIT industry. With prime assets, a strong financial standing, and a vision for long-term growth, MREIT is set to deliver enhanced value for investors while shaping the future of office real estate in the region.
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