MAKATI CITY — Shareholders of AREIT, Inc., the real estate investment trust sponsored by Ayala Land, Inc. (ALI), have approved a landmark PHP17.3-billion property-for-shares transaction that will significantly broaden the trust's portfolio and reinforce its position as a leading diversified REIT in the Philippines. The approval, secured during a special stockholders' meeting on September 23, 2026, paves the way for the infusion of six commercial assets comprising four malls and two hotels. This strategic move is set to elevate AREIT's assets under management to PHP177 billion from PHP159 billion, marking a new chapter in its growth journey.
Makati Assets at the Forefront of Expansion
The transaction carries particular significance for Makati City, as two of the six properties are located within the city's premier business districts. Glorietta 4, a cornerstone of the Makati Central Business District, and Ayala Malls Circuit in Makati are among the assets being infused into AREIT. The 578-room New World Makati Hotel also joins the portfolio, further cementing Makati's role as a hub for AREIT's retail and hospitality growth. In exchange for these assets, ALI and its subsidiaries will subscribe to 462.48 million new AREIT common shares at an exchange price of PHP37.48 per share. The deal also includes Ayala Malls Cloverleaf in Quezon City, Ayala Malls Capitol Central in Bacolod, and Seda Vertis North in Quezon City. These additional properties broaden AREIT's geographic reach while complementing its core Makati holdings.
A Strategic Shift Toward Retail and Hospitality
This infusion represents a deliberate step to reduce AREIT's historical reliance on office properties. Following the transaction, retail and hospitality assets will collectively account for 41 percent of AREIT's post-swap portfolio, the highest proportion in the trust's history. Offices will comprise 55 percent, retail 33 percent, hotels 8 percent, and land 4 percent.
The deal introduces new lease structures designed to give AREIT greater participation in the operating performance of its assets. The four malls will be held under direct leases, while the two hotels will operate under hybrid master leases that combine a fixed base rent with a variable component tied to hotel revenues. This structure aims to enhance income stability while capturing upside from tourism and consumer spending.
Path Forward and Regulatory Milestone
With shareholder approval now secured, the transaction will be submitted to the Securities and Exchange Commission for final regulatory clearance. Income from the properties will begin accruing to AREIT, and the corresponding shares will be issued to ALI and its subsidiaries, only upon securing SEC approval. This final step is expected to complete the transaction and formally integrate the new assets into AREIT's portfolio. This expansion builds on AREIT's strong financial momentum, with the trust reporting a 30 percent year-on-year increase in first-half 2026 revenues to PHP7.7 billion and a 36 percent rise in net income excluding fair-value changes to PHP5.8 billion. The infusion is expected to be accretive to distributable income and support sustainable dividend growth for shareholders.
