Philippine REITs experience growth fueled by resilient BPO industry

Manila, PhilippinesMREIT Inc., led by billionaire Andrew Tan, and AREIT Inc., of the Ayala Group, have both reported increased earnings for Q1 2023, driven primarily by steady demand from the business process outsourcing (BPO) sector for commercial and office rentals.

The two companies are among the largest real estate investment trusts (REITs) in the Philippines, entities that hold income-producing real estate, focusing on dividends.

MREIT announced a 12% increase in distributable income to P713 million ($12.8 million) in the first quarter, bolstered by the acquisition of P5.3 billion worth of Grade A offices from Megaworld Corp. The company’s revenues also swelled by 15% to P1 billion within the same period.

Kevin L. Tan, MREIT president and CEO, acknowledged this growth, stating, “We have achieved another milestone for MREIT as we closed our promised acquisition. As we progress, our focus remains on acquiring high-quality assets and providing sustainable income to our investors, setting the stage for MREIT’s next growth phase.”

MREIT declared dividends of P0.2476 per share, payable on June 19 to shareholders on record as of May 29, 2023. The company reported an above-industry occupancy rate of 95% at the end of March, with tenants predominantly consisting of BPO companies and traditional offices.

Kevin Tan pointed out the resilience of the office industry, stating, “We anticipate the remaining challenges to be temporary and plan to stay at the forefront of the emerging demand, particularly from the expanding BPO industry.”

Meanwhile, AREIT reported a 27% rise in net income to P1.01 billion in Q1 2023, after accounting for net fair value changes in investment properties. The company ended the quarter with an impressive occupancy rate of 97%.

Recently, AREIT shareholders approved a P22.5 billion acquisition of high-value malls and offices from Ayala Land, including BPO buildings in Ayala Center, One Ayala Avenue East and West BPO Towers, and MarQuee Mall in Angeles, Pampanga, demonstrating the continued growth and demand within the BPO industry. –

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