The Zobel family-led Ayala Land Inc will redeploy P2.7 billion in proceeds from the sale of AREIT shares toward the development of projects such as the new Bank of the Philippine Islands headquarters and the five-star Mandarin Oriental Hotel in Makati City.
On Tuesday, Ayala Land provided a breakdown of the sale proceeds of 75 million AREIT shares at P36.20 per share. This was in line with the required disclosure rules.
The proceeds from the sale will be used for the development of three main properties: one office building, one residential development, and one hotel in Manila.
The projects
The largest disbursement, or P1.18 billion, will be used for the 276-room Mandarin Oriental project, which is set to be finished by 2026.
The project had reached a completion rate of 57 percent, the filing showed.
Ayala Land will also allocate P1.04 billion for the 45-story BPI headquarters redevelopment.
The new BPI office tower, which is 26 percent finished, is expected to open in 2029.
Finally, the developer plans to allocate P478 million for the 5-block residential development Arbor Lanes, which will open next year.
Purpose of share sale
Ayala confirmed the sale of shares in its real estate investment trust arm was meant for future asset injections.
“The sale was made in anticipation of potential infusions that Ayala Land Inc. may make, in line with its commitment to grow AREIT’s portfolio and in accordance with AREIT’s three-year growth plan,” the developer said.
Analyst view
Joey Cipres, research analyst at AP Securites Inc., had issued a “buy” rating on AREIT, with a price target of P43.64 per share.
“We are rerating AREIT back to a buy, taking into consideration the beginning of the [Bangko Sentral ng Pilipinas’] rate cut cycle, alongside future dividend-accretive asset infusions,” Cipres said.
AREIT shares slipped 0.13 percent to P37 each on Tuesday while Ayala Land rose 2.96 percent to P38.30 per share.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
