The Securities and Exchange Commission (SEC) has approved the property-for-share swap agreement between real estate firm Ayala Land, Inc. and its real estate investment trust AREIT, Inc.
Under this agreement, Ayala Land transferred ownership of six buildings at the Cebu IT Park in Cebu City to AREIT in exchange for 252,136,383 primary common AREIT shares at a transaction price of P44.65 per share.
The six properties are valued at around P11.26 billion and the exchange is tax-free under Section 40(C)(2) of the Tax Code, Ayala Land said in a disclosure Wednesday, Jan. 18, 2023.
The assets transferred to AREIT are all accredited with the Philippine Economic Zone Authority. They are as follows:
eBloc 1 – 20,842 sq. meters of gross leasable space completed in 2009, with occupancy of 96%;
eBloc 2 – 27,727 sq. meters of gross leasable space completed in 2011, with occupancy of 98%;
eBloc 3 – 15,233 sq. meters of gross leasable space completed in 2014, with occupancy of 97%;
eBloc 4 – 16,167 sq. meters of gross leasable space completed in 2015, with occupancy of 99%;
ACC Tower – 27,517 sq. meters of gross leasable space completed in 2016, with occupancy of 97%; and
Tech Tower 1 – 16,813 sq. meters of gross leasable space completed in 2018, with occupancy of 91%.
The exchange increased AREIT's portfolio to 673,000 square meters of gross leasable area and its assets to P64 billion from P53 billion. The next step is for AREIT to apply for the Bureau of Internal Revenue Certificate Authorizing Registration for the new assets. AREIT will also apply for the listing of the shares in favor of Ayala Land within the first quarter of 2023.
Ayala Land owns 60.32% of AREIT, which was the first real estate investment trust listed on the Philippine Stock Exchange in the middle of the Covid-19 pandemic. A real estate investment trust is a company that owns and operates income-generating real estate assets. (Marites Villamor-Ilano)