RLC to boost REIT unit with P33.9-B asset infusion

By Revin Mikhael D. Ochave, Reporter

GOKONGWEI-LED Robinsons Land Corp. (RLC) will infuse 13 commercial assets into its real estate investment trust (REIT) unit in exchange for P33.9 billion worth of primary common shares under a property-for-share swap deal.

In separate disclosures on Thursday, RLC and RL Commercial REIT, Inc. (RCR) said their respective boards approved a property-for-share swap transaction between the two companies that is seen to bolster the latter’s portfolio.

RLC will subscribe to 4.99 billion RCR primary shares at P6.80 apiece, equivalent to P33.92 billion in exchange for 13 commercial assets covering 347,329 square meters (sq.m.) of gross leasable space (GLA).

The transaction brings RCR’s GLA to 827,808 sq.m. from the previous 480,479 sq.m.

“The assets have been selected based on RCR’s investment criteria of maximizing dividend yield accretion through the infusion of high-quality commercial properties that complement the company’s existing portfolio of sixteen premium assets,” RCR said.

The properties involved in the swap deal include 11 malls totaling 278,526 sq.m. of leasable space namely, Robinsons Novaliches, Robinsons Cainta, Robinsons Luisita, Robinsons Cabanatuan, Robinsons Lipa, Robinsons Sta. Rosa, Robinsons Imus, Robinsons Los Baños, Robinsons Palawan, Robinsons Ormoc, and Cybergate Davao.

The deal also includes two office assets totaling 68,803 sq.m. of leasable space, namely Giga Tower in the Bridgetowne Destination Estate, Quezon City, and Cybergate Delta 2 in Davao City.

“The planned asset infusion will diversify our predominantly office asset portfolio with the inclusion of mall assets. This is in line with RCR’s commitment to shareholders to continuously grow the company,” RCR President and Chief Executive Officer Jericho P. Go said in a separate statement.

“Our fund manager, RL Fund Management, Inc., has identified the assets that will maximize the additional value delivered to our shareholders,” he added.

RLC said the transaction is still subject to regulatory approval and will be presented for stockholders’ approval during RCR’s special stockholders’ meeting on July 15, to be completed within the year.

“Revenues shall accrue to RCR starting on April 1, 2024, subject to the approval of the stockholders and pertinent regulatory bodies. The company targets to secure regulatory approvals for the property-for-share swap within the year,” it said.

“After the infusion, RCR will remain as the Philippine REIT with the widest geographical reach, with assets in eighteen key locations,” it added.

Sought for comment, AP Securities, Inc. Research Analyst Jose Antonio B. Cipres said in a Viber message that the transaction bodes positively for RCR.

“We see this as a positive progression for the company especially given the cloudy atmosphere surrounding offices primarily due to the emergence of work-from-home setups. We reiterate our bullishness towards the mall segment on the back of eventual pickup in consumer demand which would in turn boost mall occupancy,” he said.

“This is positive as well as majority of their infusions right now is outside Metro Manila wherein demand is currently shifting,” he added.

Mr. Cipres added that the transaction makes RCR more attractive to investors.

“The infusion is a substantial addition of 72.3% to RCR’s current GLA. It makes RCR all the more attractive not only because of its higher yield versus other REITs but also its diversification strategy,” he said.

For the first quarter, RCR’s net income rose by 4% to P1.12 billion. Its current investment portfolio following the infusion includes about 1.4 million sq.m. of leasable mall spaces, approximately 253,000 sq.m. of remaining leasable office spaces, 26 hotels with a total of 4,243 room keys, and 244,000 sq.m. of leasable logistics facilities.

On Thursday, RCR shares rose by 3.8% or 19 centavos to P5.19 apiece while RLC stocks gained by 0.51% or eight centavos to P15.68 per share.