The Securities and Exchange Commission ( SEC ) of the Philippines has approved the initial public offerings ( IPOs ) of two more real estate investment trusts ( Reits ) sponsored by Robinsons Land Corporation ( RLC ) and Megaworld Corporation.

In its meeting on August 3, the SEC en banc resolved to render effective the registration statements of RL Commercial REIT and MREIT covering shares for public offering for as much as 26.7 billion pesos ( US$529.62 million ) and 27.3 billion pesos, respectively, subject to their compliance with certain remaining requirements.

RL Commercial REIT and MREIT will follow the market debut of AREIT of Ayala Land in August 2020 and DDMP REIT of DoubleDragon Properties Corporation in March 2021, as well as the ongoing Reit offering of Filinvest Land’s Filinvest REIT Corporation.

RL Commercial REIT’s registration statement covers about 9.95 billion common shares for listing on the main board of the Philippine Stock Exchange ( PSE ). It will offer up to 3.34 billion secondary common shares at a price of up to 7.31 pesos per share, with an overallotment option of up to 305.10 million common shares.

The offer shares are currently held by RLC, which could generate up to 25.88 billion pesos in net proceeds should the overallotment be fully exercised. New investors will account for 36.67% of RL Commercial REIT’s issued and outstanding common shares, while the existing shareholders will retain the remaining 63.33%, should the company exercise the oversubscription option.

IPO timetable

RL Commercial REIT will conduct the IPO from August 31 to September 8, and list on the PSE on September 20, based on the latest timetable submitted to the SEC.

The company has mandated BPI Capital Corporation and UBS as joint global coordinators, lead managers and bookrunners for the offering. UBS will serve as lead international bookrunner, while BofA Securities and CLSA will also act as international bookrunners. BPI Capital will likewise serve as lead local underwriter, with China Bank Capital Corporation as local underwriter.

RL Commercial REIT’s portfolio includes 14 commercial real estate assets with an aggregate gross leasable area ( GLA ) of 425,315 sq m. Its commercial spaces are primarily leased for office purposes, which may be transformed into retail spaces as required.

The RLC-sponsored Reit has tapped RL Fund Management and RL Property Management as property manager and fund manager, respectively.

On the other hand, MREIT’s registration statement covers over 2.53 billion common shares for listing also on the main board of the PSE. It will offer about 1.08 billion secondary shares priced at up to 22 pesos per share, with an overallotment option of up to 161.70 million common shares. The offer shares are currently owned by Megaworld. Should the overallotment option be fully exercised, the IPO could generate up to 26.3 billion pesos in net proceeds for Megaworld.

Based on the latest timetable submitted to the SEC, the MREIT IPO is expected to run from August 23 to August 27 in time for the REIT’s listing on the PSE on September 6.

Public float

Assuming the full exercise of the overallotment option, MREIT will have a public float of 49% post-IPO. BDO Capital & Investment Corporation, Credit Suisse, UBS and DBS have been mandated as joint global coordinators and bookrunners for the offering. Credit Suisse, UBS, DBS and CLSA will also act as international bookrunners, while BDO Capital will serve as the domestic lead underwriter.

MREIT has also engaged First Metro Investment Corporation, Investment & Capital Corporation of the Philippines, RCBC Capital Corporation and SB Capital Investment Corporation as domestic co-lead underwriters. MREIT Fund Managers and MREIT Property Managers will serve as the Reit fund manager and property manager, respectively.

MREIT’s initial portfolio covers an aggregate GLA of 224,430.8 sq m across 10 properties, with an aggregate appraised value of about 49.32 billion pesos. Its properties are spread out across Metro Manila, primarily in Taguig City and Quezon City, as well as in Iloilo City.

Proceeds from the offerings of RL Commercial REIT and MREIT shall be reinvested in the Philippines, pursuant to the Revised Implementing Rules and Regulations of Republic Act No 9856, or the Real Estate Investment Trust ( Reit ) Act of 2009, issued in January 2020.

As mandated by law, both companies shall also distribute to shareholders at least 90% of their annual distributable income as dividends. The distributable income refers to the company’s net income as adjusted for unrealized gains and losses/expenses and impairment losses, and other items in accordance with internationally accepted accounting standards. It excludes proceeds from the sale of the Reit’s assets that are reinvested in the Reit within one year from the date of the sale.