VILLAR’S VISTAREIT DOWNSIZES IPO AS MARKET FACES INFLATION RISKS
Billionaire Manuel Villar Jr.’s VistaREIT Inc. (VREIT) cut the value of its upcoming initial public offering (IPO) by almost half to P4.8 billion as the group’s real estate investment trust (REIT) arm begins selling shares amid challenging market conditions.
In a May 26 letter to the Philippine Stock Exchange (PSE), VREIT president and CEO Manuel Paolo Villar said the final IPO price was set at P1.75 per share. This was 30 percent below the indicative maximum offer price of P2.50 per share.
Moreover, Villar said VREIT had cut the share offer size by 25 percent to 2.75 billion shares, which includes a 250 million overallotment option.
In its initial IPO prospectus, VREIT was planning to sell up to 3.67 billion shares at a maximum price of P2.50, originally valuing the IPO by as much as P9.2 billion.
In the letter, VREIT acknowledged the significant changes from its original prospectus.
‘Incrementally negative’
The company said it was still waiting for feedback from the Securities and Exchange Commission “on any further disclosures required to be made with respect to the revised offer size.”
VREIT is expected to hold the share offer from May 30 uned til June 3. The target listing date on the PSE was set for June 15.
The company is selling shares as local and global equities are roiled by inflationary pressures and recession worries.
In a report last May 8, US financial services giant J.P. Morgan said it had turned “incrementally negative” on Philippine property firms heavily exposed in the office and residential segments.
J.P. Morgan, which downgraded the Philippine property sector to “neutral,” also cited “earnings/ growth risk from the pivot to a hybrid work setup, and higher construction and debt cost.”
VREIT would allow investors to take a stake in the Villar Group’s massive portfolio of malls and office buildings.
In its initial IPO prospectus, VREIT said its assets would include 10 malls in Luzon and Cebu with a gross leasable area (GLA) of over 220,000 square meters and two office buildings with a GLA of about 36,370 sqm.
The selling shareholders were Masterpiece Asia Properties, Inc., Manuela Corp., Vista Residences Inc., Crown Asia Properties Inc. and Communities Pampanga Inc., which are subsidiaries of Villar’s listed flagship property company, Vista Land & Lifescapes Inc.