THE real estate investment trust (REIT) of Tan-led Megaworld Corp. logged a 13% increase in its distributable income as of September amid higher revenues and income contribution from new office assets.
In a regulatory filing on Tuesday, MREIT, Inc. said its nine-month distributable income climbed to P2.1 billion from P1.9 billion a year ago.
“This was primarily due to the income contribution beginning this year of the four newly acquired Grade-A office towers worth P5.3 billion,” MREIT said.
In March, MREIT announced that it had secured government approval for the acquisition of four properties: Festive Walk 1B and Two Global Center in Iloilo Business Park, and One West Campus and Five West Campus in McKinley West, Taguig City to boost its asset portfolio.
MREIT’s third-quarter revenues rose 15% to P3.1 billion from P1.8 billion a year ago.
“Aside from the new assets which drove majority of the revenue growth, continued rental escalations of existing tenants also supported MREIT’s revenue growth,” the company said.
MREIT said its average occupancy rate reached 95% as of end-September, higher than the 81%-82% average occupancy rate in the Metro Manila office industry, based on figures from various property consultants.
The company added that 94% of its occupied space is from business process outsourcing and traditional office tenants that have long-term commitments to their leases and operations.
“The consistent outperformance of MREIT compared to industry benchmarks while delivering solid results underscore the quality of our assets and their prime locations. We remain committed on sustaining our earnings growth and distributions by ensuring high occupancy and implementing escalations when possible,” MREIT President and Chief Executive Officer Kevin L. Tan said.
“We are also actively seeking opportunities for growth through strategic acquisitions, so long as the valuations remain beneficial for our shareholders,” he added.
Meanwhile, MREIT said it remains committed to achieving 500,000 square meters (sq.m.) of gross leasable area (GLA) by end-2024.
MREIT and parent company Megaworld signed a memorandum of understanding (MoU) in June for the possible acquisition of seven Grade-A office assets with around 150,500 sq.m. of GLA. Once completed, MREIT’s total GLA portfolio will hit 475,500 sq.m.
The MoU included buildings situated in Megaworld townships such as McKinley Hill, McKinley West, Iloilo Business Park, and Davao Park District.
Mr. Tan said that while the MoU with Megaworld is focused on office spaces, “we are also keenly observing the impressive growth of Megaworld’s retail assets.”
“Average daily tenant sales of Megaworld’s malls have surpassed 2019 levels by a large margin, underscoring the strength of consumer spending despite macroeconomic headwinds,” he said.
Currently, MREIT’s portfolio has 18 office properties located across four Megaworld townships. These properties include 1800 Eastwood Avenue, 1880 Eastwood Avenue, and E-Commerce Plaza in Eastwood City; One World Square, Two World Square, Three World Square, 8/10 Upper McKinley, 18/20 Upper McKinley, and World Finance Plaza in McKinley Hill.
Other properties under MREIT’s portfolio are One Techno Place, Two Techno Place, Three Techno Place, One Global Center, Two Global Center, Festive Walk 1B, and Richmonde Tower in Iloilo Business Park; and One West Campus and Five West Campus in McKinley West.
Shares of MREIT at the local bourse closed unchanged at P12.20 apiece on Tuesday. — Revin Mikhael D. Ochave