MREIT expands beyond offices with retail asset pipeline

MREIT, INC. said it is on track to nearly double its portfolio to about 1 million square meters (sq.m.) of gross leasable area as it pushes deeper into retail and hospitality assets through its biggest planned acquisition to date.

“We are on track to reach at least 1 million sq.m., well ahead of our original timeline,” MREIT President and Chief Executive Officer Jose Arnulfo C. Batac told the company’s annual stockholders’ meeting on May 29.

The expansion signals MREIT’s broader strategy of reducing reliance on office assets as demand conditions evolve across the property sector.

Mr. Batac said the company’s fourth wave of asset infusions expanded its portfolio to about 647,000 sq.m., while a memorandum of understanding signed with related parties covers another pipeline of roughly 300,000 sq.m. of office, retail and hospitality properties.

“This alone would take us as close to 950,000 sq.m., putting the 1 million sq.m. closely within reach,” he added.

MREIT on Friday announced the proposed acquisition of 12 commercial properties that would raise its gross leasable area to about 950,000 sq.m.

The deal covers about 303,500 sq.m. of office, retail and hospitality assets within the Alliance Global Group, Inc. network and would mark the company’s biggest single-asset acquisition.

The properties include Eastwood Mall in Quezon City, Venice Mall in Taguig City, Lucky Chinatown Mall in Manila, Festive Walk Mall in Iloilo City, and Southwoods Mall in Biñan, Laguna.

Six office buildings are also included in the proposed transaction, alongside Holiday Inn Express Manila in Newport City.

MREIT said the acquisition would reshape its portfolio composition from more than 95% office assets to about 77% office, 20% retail and 3% hospitality assets.

“Final composition and timing remains subject to regulatory and corporate approvals, but the direction is clear,” Mr. Batac said.

“We have the pipeline, the sponsor support, and the institutional capacity to execute, and we intend to deliver this growth on a disciplined, active basis,” he added.

The company said hospitality properties included in the portfolio would operate under long-term leaseback arrangements to preserve predictable income streams.

“For hospitality, the assets will be fully leased back to the operator under long-term arrangements with built-in annual escalations,” Mr. Batac said.

For retail assets, MREIT said it plans to rely on Megaworld Corp.’s existing township leasing and property management operations.

The company also said it sees room to improve operating efficiency across the incoming assets through tighter property management and renewable energy initiatives.

“Many of these assets in the pipeline are already mature and well occupied,” Mr. Batac said.

“Our focus will be on optimizing operating costs through tighter property management, energy and utility improvements, and the renewable energy transition we have already completed across our existing portfolio,” he added. — Alexandria Grace C. Magno