MREIT earnings up 13% to ₱2.1 B

MREIT Inc., the real estate investment trust of Megaworld Corporation, posted a distributable income growth of 13 percent to P2.1 billion during the first nine months of 2023 from the P1.9 billion recorded in the same period last year.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said this was primarily due to the income contribution beginning this year of the four newly-acquired Grade-a office towers worth P5.3 billion.

What makes MREIT an attractive option for investors

Revenues grew by 15 percent to P3.1 billion from the P2.7 billion recorded in the first nine months last year.

Aside from the new assets which drove majority of the revenue growth, continued rental escalations of existing tenants also supported MREIT’S revenue growth.

MREIT said its high quality portfolio allowed it to maintain an impressive average occupancy rate of 95 percent as of end-september 2023.

This is above the broader office industry’s average occupancy rate of around 81 percent to 82 percent in Metro Manila, based on figures released by various property consultants.

Of MREIT’S occupied space, 94 percent is composed of reputable BPO and traditional office tenants with long-term commitment 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,” said MREIT President and CEO Kevin L. Tan.

He added that, “we remain committed on sustaining our earnings growth and distributions by ensuring high occupancy and implementing escalations when possible. We are also actively seeking opportunities for growth through strategic acquisitions, so long as the valuations remain beneficial for our shareholders.”

Last June 2023, MREIT and Megaworld signed a memorandum of understanding (MOU) for the potential acquisition of seven grade A office assets with a total gross leasable area (GLA) of around 150,500 square meters.

These include buildings located in Megaworld townships Mckinley Hill, Mckinley West, Iloilo Business Park, and Davao Park District.

Once the acquisition is completed, this will increase MREIT’S total portfolio GLA by 46 percent to 475,500 sqm. MREIT remains committed to its target portfolio of 500,000 sqm of GLA by end2024.

“While our recent MOU with Megaworld is focused on office spaces, we are also keenly observing the impressive growth of Megaworld’s retail assets,” said Tan.

He noted that, “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.”

Meanwhile, MREIT has declared cash dividends of P0.2460 per share to its shareholders. The dividends will be payable on Dec. 14, 2023 to shareholders on record as of Nov. 20, 2023.

Total dividends for the first nine months of the year stands at P0.7412 per share. Annualized, this brings MREIT’S dividend yield to 8.1 percent, as of the closing share price of P12.20 per share on Nov. 6, 2023.