MANILA -- Philippine developer Megaworld, a top lessor of office space for call centers and other outsourcing companies, plans to raise up to 27.3 billion pesos ($567 million) in the country's largest real estate investment trust offering.
Megaworld is the fifth local real estate company to formally announce it will tap the new investment instrument to build a war chest for post-pandemic recovery. Two of those developers have already listed their REITs on the Philippine Stock Exchange.
The company plans to offer up to 1.24 billion shares at up to 22 pesos apiece, which would make it the country's largest REIT assuming the overallotment option is exercised at that price. Megaworld did not indicate a timetable for the initial public offering, saying it will depend on market conditions and regulatory clearances.
"Megaworld intends to reinvest the net proceeds from the offer in 16 projects all over the country," the company said. Megaworld is a unit of the Alliance Global Group conglomerate, which has interests in liquor, resorts and casinos, and McDonald's Philippines.
The vehicle, called MREIT Inc., will have a portfolio of 10 office, retail and hotel assets with a combined leasable area of 224,430 sq. meters. The assets are located in three mixed-use "townships": Eastwood City and McKinley Hill in Metro Manila, and Iloilo Business Park in the central city of Iloilo.
"Our tried-and-tested signature concept of the township has attracted over 200 BPO [business process outsourcing] and multinational companies to locate with us through the years since we started our first-ever Eastwood cyberpark in 1999," said Kevin Tan, MREIT president and chief executive. Tan is the son of Andrew Tan, the chair and founder of Alliance Global.
Business process outsourcing is a key industry in the Philippines, dominated by the call center sector but also including segments such as software support and financial services. The sector is one of the few that demonstrated resilience during the pandemic, with head count growing by 1.8% to 1.32 million and revenue by 1.4% to $26.7 billion in 2020.
Robinsons Land, part of the JG Summit Holdings conglomerate, and Cyberzone Properties of the Filinvest group are also preparing REIT offerings, aiming to raise up to 26.7 billion pesos and 14.9 billion pesos, respectively.
REIT regulations have been in place for a decade, but the country's first listing came only last year, after the government relaxed public ownership and tax rules.
Ayala Land's AREIT debuted on the stock exchange after raising 13.57 billion pesos last year, while tycoon Injap Sia's DDMP REIT, which raised 14.7 billion pesos, listed in March.
Their performances have been mixed, with AREIT up by 36% and DDMP down by 8%.