The Megaworld-backed real estate investment trust signed an agreement to acquire 12 properties spanning about 303,500 square meters, expanding its portfolio by 47 percent to roughly 950,000 square meters.
The transaction is anchored by some of Megaworld’s best-known assets, including Eastwood Mall, Venice Mall, Lucky Chinatown Mall, Festive Walk Mall in Iloilo, Southwoods Mall in Laguna and Holiday Inn Express Manila in Newport City.
Management’s view
The deal, dubbed as the company’s “Wave 5” asset injections marks MREIT’s transition from a near pure-office REIT into a diversified landlord with exposure to retail, office and hospitality assets.
"Wave 5 is the biggest step in MREIT's growth journey since our IPO. This transaction transforms MREIT from an office REIT into a diversified REIT, anchored by some of the most iconic mall and lifestyle assets in the country," Tan, the chair of MREIT, said in a statement on Friday.
“We are positioning MREIT for the next decade of compounding growth,” he added.
A bet beyond offices
Once completed, office assets will account for about 77 percent of the portfolio, down from more than 95 percent today, while retail and hospitality will contribute the balance.
The incoming portfolio includes five malls totaling about 160,000 square meters, six Grade A office buildings with 117,000 square meters of leasable space and a 26,500-square-meter internationally branded hotel.
“This transaction transforms MREIT from an office REIT into a diversified REIT, anchored by some of the most iconic mall and lifestyle assets in the country,” chairman Kevin Tan said.
The transaction also expands MREIT’s presence from five townships to nine, adding exposure to Arcovia City, Lucky Chinatown, Newport City and Southwoods City.
Dividend growth remains the story
For investors, the bigger attraction remains dividends.
Management said the transaction is being structured to immediately boost dividends per share, following the same framework used in Wave 4, which helped deliver a record quarterly payout in the first quarter.
The assets being acquired carry a combined occupancy rate of around 92 percent and a weighted average lease expiry of 5.8 years, nearly double MREIT’s current 3.1 years.
That longer lease profile extends income visibility and strengthens the predictability of future cash flows.
Megaworld’s pipeline runs deeper
Beyond the malls, MREIT will also acquire Venice Corporate Center and Science Hub Tower 2 in McKinley Hill, Six West Campus in McKinley West, One Paseo in Arcovia City, Global One in Eastwood City and Horizon Center in Newport City.
Together with Holiday Inn Express Manila, the assets give MREIT exposure to office workers, shoppers and tourists under a single portfolio while broadening its income sources across economic cycles.
Since its 2021 IPO, MREIT has almost tripled its portfolio from 224,000 square meters to 647,000 square meters through four infusion waves, with Wave 5 poised to become its largest and most transformative transaction yet.
—Edited by Miguel R. Camus
