Buildings stand illuminated at night in the Makati central business district on Saturday, Aug. 4, … [+]
AREIT Inc—the real estate investment trust controlled by billionaire Jaime Zobel de Ayala and his family’s Ayala Land Inc. (ALI)—said last week it has agreed to buy prime properties worth 30 billion pesos ($542 million) from its parent and affiliate companies, boosting its assets under management to 117 billion pesos.
The assets to be acquired by AREIT include the Ayala Triangle Gardens Tower 2, a 40-story premium office building that houses the headquarters of ALI’s parent company Ayala Corp. A 24-story five-star hotel sits right next to the skyscraper, which is part of the 18,150 square meter Ayala Triangle Gardens at the heart of the Makati central business district.
Other assets include the Greenbelt 3 and 5 shopping malls along with the 348-room Holiday Inn and Suites Makati, which are both located within the Makati CBD. AREIT is also buying the 301-room Seda Ayala Center Cebu, some 800 kilometers south of Manila.
“The inclusion of Ayala Tower Two and Greenbelt 3 and 5—some of ALI’s prime assets in Makati, is a testament to our continued commitment to AREIT’S long-term growth,” Anna Ma. Margarita B. Dy, ALI president and CEO, said in a statement. Dy, an honoree of Forbes Asia’s Power BusinessWomen 2023, said ALI has injected about 59 billion pesos of assets into AREIT since its IPO in 2020.
As payment for the Makati and Cebu properties, AREIT will issue ALI, and its subsidiaries Greenhaven Property Ventures and Cebu Insular Hotel, 21.8 billion pesos worth of AREIT shares. Separately, AREIT is buying Seda Lio, a 153-room luxury resort in El Nido, Palawan, for 1.19 billion pesos.
AREIT will invest another 6.8 billion pesos to buy a 276-hectare land in Zambales, north of Manila, from a subsidiary of ACEN Corp, the renewable energy unit of Ayala Corp. The land will then be leased back to ACEN’s Giga Ace 8, which is operating a solar farm on the site, for 25 years, providing AREIT a guaranteed rental income.
“We deliberately planned the acquisition to have a healthy mix of malls, offices, hotels and industrial properties, which broadens and mitigates concentration risk to a particular sector,” Carol Mills, AREIT president and CEO said in a statement.
AREIT’s net profit increased 42% to 3.43 billion pesos in the first nine months of the year, compared to the previous year, bolstered by robust occupancy levels of 97%.
With a net worth of $2.8 billion, Jaime Zobel de Ayala, 89, was ranked the country’s ninth-richest person when the list of the Philippines’ 50 Richest was published in August. The family patriarch retired in 2006, and his eldest son Jaime Augusto Zobel de Ayala, who had been the CEO of Ayala Corp. since 1994, succeeded him as chairman. Ayala Corp is among the archipelago’s oldest conglomerates, which traces its roots to the Spanish colonial era. Besides real estate and power, it has interests in banking and telecommunications.