Ayala Land - AREIT - Company of the Year - Real Estate

Company: Ayala Land, Inc. | AREIT Inc. , Makati City, Metro Manila
Company Description: Ayala Land, Inc. is the largest property developer in the Philippines, designing large-scale, mixed-use estates that have grown into thriving economic centers. AREIT, Inc. (AREIT) is the first Philippine Real Estate Investment Trust (REIT), pioneered by the country’s largest and most trusted real estate developer, Ayala Land, Inc. (ALI), as its sponsor.
Nomination Category: Company / Organization Categories
Nomination Sub Category: Company of the Year - Real Estate - Large

Nomination Title: Ayala Land, Inc. | AREIT, Inc.

AREIT, Inc. (AREIT) is the first Philippine Real Estate Investment Trust (REIT), pioneered by the country’s largest and most trusted real estate developer, Ayala Land, Inc. (ALI), as its sponsor.

While REITs have gained traction in capital markets of neighboring countries since 2000, the Philippine REIT industry did not take off until two decades later when the government revised the legal framework which addressed pain points of the previous REIT law.

Seeing the potential of the REIT market, AREIT pushed through with its initial public offering (IPO) last August 2020 despite economic challenges introduced by the global health crisis. It was well received by the market, two times oversubscribed. Since then, share price has grown by 27.5%, outperforming both the Philippine Stock Exchange and the Philippine Property indices. AREIT’s dividend declaration of PHP1.32 per share in 2020 enabled AREIT to boost total shareholder return to 30.8% since the IPO.

Within five months from listing, AREIT more than doubled its portfolio from 153 thousand to 344 thousand square meters of leasable area. AREIT was also included by FTSE Russell of the London Stock Exchange as one of its index stocks in the FTSE MICRO-CAP Index last March 19.

Despite unstable economic conditions, AREIT’s PHP13.6 billion IPO carried on and was able gain the confidence of the public landing two times oversubscription.

AREIT recorded a full-year net income of PHP1.23 billion on revenues of PHP1.95 billion and net income of PHP1.23 billion, higher than REIT plan projections. This allowed AREIT to distribute quarterly cash dividends to shareholders, achieving full-year dividends on 2020 income of PHP1.32 per share, thereby boosting total shareholder return to about 30.8% since the IPO.

Its business remains resilient, with uninterrupted operations despite widespread community lockdowns. AREIT’s properties continue to have an excellent operating track record with 99% average occupancy and a stable tenant mix of top multinational and local companies helping provide over 50,000 jobs for Filipinos and further reinforcing AREIT’s capability as a stable long-term investment.

Within 5 months from listing, AREIT diversified and more than doubled its portfolio to 344 thousand square meters with the acquisition of three prime assets in key growth centers—Teleperformance Cebu, The 30th Commercial Development in Pasig and Industrial Lots in Laguna Technopark. AREIT has also recently secured plans to include an additional ten (10) assets by property-for-share swap with principal sponsor, ALI. This will in effect expand AREIT’s leasing portfolio to 549 thousand sq.m., grow overall asset value to PHP52 billion, and increase distributable income for shareholders this year.

It has been a difficult journey for the Philippine real estate market taking a drastic shift towards uncertainty with severe income reduction across segments, major GDP contraction to as low as -9.5%, and a negative outlook on the industry’s future. With capital constraints in mind, developers were challenged by a recessing property market to adapt and explore innovations to refuel economic activity.

AREIT took this initiative in an effort to reenergize the market and drive investor participation through the launch of the first REIT in the Philippines. AREIT was able to provide an investment option for Filipinos to partake in the income and growth of commercial real estate and deliver sustainable value even during a precarious time. This helped grant greater inclusivity in the nation’s property market while promoting capital recycling and reinvestment in the country.

With quality assets in prime locations, high long-term occupancy among properties, and an experienced management team, AREIT gained the confidence of the public and demonstrated how a REIT could continue driving the gears of the Philippine economy even under very dire circumstances.

Being the first mover in the Philippine REIT market, AREIT was instrumental in refining the implementing guidelines for REITs in the Philippines as the leading example. Other local developers are slowly following AREIT’s footsteps with the recent launch of DDMP REIT by DoubleDragon Properties last March 2021, while other players like Filinvest, Megaworld, and Robinsons have also announced their intent to launch their own REITs in the near future.

AREIT has been recognized in less than a year since its listing by several international institutions earning prestigious awards such as ‘Best IPO in the Country’ by The Asset Country Awards 2020, ’Best IPO in South East Asia’ by FinanceAsia 2020 Achievement Awards, ‘Best Investor Relations in a Corporate Transaction’ by IR Magazine 2020 South East Asia Awards, and ‘Best Equity Deal of the Year’ by IFLR 2021 Asia-Pacific Awards and The 5th Annual ALB Philippine Law Awards 2020.

AREIT Website https://www.areit.com.ph/
AREIT Corporate Video https://www.areit.com.ph/media/pages/presentations/a4912e9280-1619687503/areit-corporate-video.mp4

Official Annual Reports (ATTACHED)
AREIT 2020 Integrated Report
SEC/PSE Edge Disclosures (ATTACHED)
SEC FORM 17-A for the Fiscal Year Ending Dec 31, 2021
Press Release Articles (ATTACHED)
AREIT stockholders approve P15B property-for-share swap with ALI
AREIT property value to reach P52B via accretive P15B asset infusion by ALI
AREIT acquires 9.8-hectare land leased by IMI in Laguna Technopark
AREIT posts FY20 income of P1.23B, declares 4Q20 dividends of 0.39/share
AREIT 9M 2020 Analyst Briefing Slides
AREIT 9M20 Net Income at P844 million, on-track with REIT Plan

Awards
IFLR 2021 Asia-Pacific Awards https://www.iflr.com/article/b1r3m3zv1tf44x/iflr-asia-pacific-awards-2021-winners-announced
FinanceAsia 2020 Achievement Awards https://www.financeasia.com/article/financeasia-reveals-2020s-best-regional-deals/465133
The 5th Annual ALB Philippine Law Awards 2020 https://legalbusinessonline.com/law-awards/alb-philippine-law-awards-2020
IR Magazine 2020 South East Asia Awards https://events.irmagazine.com/southeastasia2020/
The Asset Country Awards 2020 https://www.theasset.com/awards/country-awards-2020-deals-south-east-asia