Philippine tycoon Andrew Tan’s Megaworld injects $255 million in office and retail assets into REIT

Billionaire from mind to property Andreas Tan‘s Megaworld Corp. plans to inject at least 15 billion pesos ($255 billion) worth of office buildings and shopping centers into its retail investment trust, mREIT.

The divestment of 10 office buildings, worth 15 billion pesos, will be completed in the first half, followed by retail properties in the second half, said Andy Dela Cruz, head of investor relations at Megaworld.

The offices will increase mREIT’s rental portfolio by 41% to 680,000 square meters, Dela Cruz said. Up to 70,000 square meters of retail space will also be injected into the Manila-listed REIT later this year, he said, adding that the value of these assets is still being determined.

Megaworld is working on the next wave of asset injections into mREIT, which aims to reach one million square meters of gross leasable area by 2027. mREIT recently received regulatory approval to increase its registered capital from 5 billion pesos to 8 billion pesos, paving the way for more stock-for-asset swap transactions.

“These offices are very busy and located in prime areas,” Dela Cruz said Forbes Asia. “Our malls also have high occupancy rates, supported by strong foot traffic.”

Nine of the 10 offices are located in McKinley Hill, one of Megaworld’s townships in the bustling Bonifacio Global City, near Makati’s central business district, while one is in Eastwood City township in Metro Manila’s northern suburb of Quezon City.

After the sale of these ten offices, Megaworld will still have 900,000 square meters of office and retail space, a strong runway for future infusions into mREIT, Dela Cruz said.

With an estimated fortune of $1.4 billion, Tan is one of the richest in the country, according to him Real-time data from Forbes. Through his flagship Alliance Global, Tan has stakes in Emperador, the world’s largest brandy maker, and the Philippine franchisee of McDonald’s.