Infusion of Megaworld malls to boost MREIT portfolio

MREIT Inc., the real estate investment trust (REIT) company of Megaworld Corp., is looking at potentially including mall properties in its portfolio, banking on the rosy outlook amid the return of foot traffic with the easing of mobility restriction.

Kevin Tan, MREIT president and CEO, said in a recent virtual event that the company was open to diversifying its portfolio, which only includes office assets.

“While the focus of MREIT is office assets, we are definitely open at looking at other classes as the opportunity arises,” he said.

“In line with the removal of mobility restrictions and improving economic activity, the Megaworld Lifestyle portfolio is definitely looking to be a very attractive diversification opportunity for MREIT,” he added.

Tan noted that Megaworld’s mall segment has about 484,000 square-meters (sqm) of gross leasable areas, “which can be potentially injected into MREIT.”

The MREIT official said that the parent company’s mall business has been regaining momentum as evidenced by the recovery of tenant sales.

As such, Megaworld has removed rental concession beginning January. “This should definitely MREIT and its shareholders exposure to the continued growth of the mall segment and further upside from rent [fees] that are collected as percent of tenant sales,” Tan said.

Recently, MREIT and sponsor Megaworld inked a memorandum of understanding for potential acquisition of seven Grade A office buildings located in Bonifacio Global City, Iloilo and Davao.

These include Two West Campus and Ten West Campus in McKinley Hill, Science Hub Tower 3 and Science Hub Tower 3 in McKinley West, One Fintech Place and Two Fintech Place in Iloilo Business Park and Davao Finance Center in Davao Park District. The properties have around 150,500 sqm in gross leasable area.

The acquisition will boost MRET’s portfolio by 46 percent to 475,000 sqm. It has a goal of having 500,000 sqm of assets under management by end of next year.

The REIT company’s portfolio currently has 18 office properties across four Megaworld townships.

In the first quarter, MREIT saw its distributable income rise by 12 percent to P713 million following the purchase of P5.3-million worth of grade A offices from Megaworld. It declared dividends of P0.2476 per share, which are payable on June 19. INQ

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