Investors welcome Megaworld REIT's market debut

Metro Manila (CNN Philippines, October 1) — Megaworld's real estate investment trust (REIT) arm made a successful market debut performance on Friday as investors bank on the property giant's plans to prop up the unit, coupled with the easing of COVID-19 rules, an analyst said.

Shares of MREIT in the Philippine Stock Exchange finished at ₱16.70 each, 3.73% higher than its initial public offering (IPO) price of ₱16.10 per share.

It even reached a high of ₱17.16 during the intraday, or 6.58% up from its IPO price.

Philstocks Financial equity analyst Claire Alviar said in a mobile message that MREIT Inc. witnessed "the best debut performance" among the REITs.

"We think that its discounted final offer price of ₱16.10 from its maximum of ₱22.00 attracts investors to buy shares of MREIT, in addition to its competitive forecasted dividend yield of 5.65% and 6.09% for the fiscal years 2022 and 2023," she added.

"Also, the sponsor's plan of injecting more assets into MREIT spurred positive sentiment since this could increase the distributable income of the company," the analyst said.

During the listing ceremony, Kevin Tan, Megaworld chief strategy officer and MREIT president and CEO, bared the plan to fuel the company's portfolio with additional office and commercial assets from premier township Uptown Bonifacio by 2023.

Currently, Uptown Bonifacio has close to 331,300 sqm of completed office and commercial projects. Another 70,000 sqm of prime office spaces are set to be completed in three years.

"These prime office and commercial assets can be potentially injected into MREIT. With BGC having the highest office rental rates among major business districts in the country, these fresh assets can truly bulk up MREIT’s portfolio, increase its rental revenues, and of course, grow the distribution yields for our investors," Tan said.

MREIT’s initial portfolio consists of 10 prime office buildings covering around 224,431 square meters in Eastwood City, McKinley Hill, and Iloilo Business Park.

Alviar also said MREIT's timing to go public was "good" since the national government has started to relax COVID rules, particularly in Metro Manila.

Until October 15, the capital region will be under Alert Level 4, allowing more sectors to operate in a limited capacity.