Real estate investment trusts (REITs) have emerged as a promising investment asset class for Filipinos through the Philippine Stock Exchange. One notable player in this space is Megaworld, which offers investors the opportunity to gain exposure to real estate without the high capital requirements of conventional properties. Megaworld REIT, Inc. (MREIT) is the real estate investment trust vehicle of Megaworld, and it is generating quite a buzz as it prepares for its initial public offering (IPO) on the Philippine Stock Exchange in the final quarter of this year. In this article, we explore the five compelling reasons why MREIT could be your next potential investment.
1. Prime Assets in Top-Notch Locations
Unlike other listed REITs, MREIT's assets are carefully selected Grade A office buildings with PEZA accreditation. These assets, owned entirely by MREIT, are located in proven top-notch township locations such as Eastwood City, McKinley Hill, and Iloilo Business Park. By investing in MREIT, you become a part-owner of these prime assets, ensuring you benefit from the stability and growth of these areas. MREIT's strategic asset selection guarantees its investors a strong foundation for long-term growth.
Caption: MREIT's Grade A office buildings are carefully chosen for their prime locations.
2. Unmatched Growth Potential
MREIT has the longest runway for growth among existing REITs in the country. With Megaworld still having around 1.2 million square meters of office assets, MREIT expects to double its portfolio to 500,000 square meters by 2024 and reach one million square meters by 2030. This ambitious expansion plan positions MREIT to become the largest REIT in terms of floor size not only in the Philippines but also in Southeast Asia. Comparatively, other major office developers in Singapore and Thailand have portfolios of around 800,000 to 1,000,000 square meters. Moreover, MREIT's acquisition of new office assets from Megaworld next year will further boost its dividend potential.
3. High-Quality Tenants and Occupancy Rates
MREIT's existing office assets enjoy close to 100% occupancy rates, ensuring maximum rental revenues for investors. These buildings house well-known companies in the IT-BPO industry, some of which have been tenants for 10 to 20 years. IBM in Eastwood City, NTT Data, WNS, Refinitiv, Ericsson, Colgate-Palmolive Philippines, Thomson Reuters, and Reed Elsevier are just a few of the prestigious tenants that occupy MREIT's buildings. This robust tenant base contributes to the stability and growth potential of MREIT's rental earnings.
4. Attractive Dividend Yield
MREIT offers an attractive dividend yield of 5.65% for the fiscal year of 2022, with the potential to reach 6.1% by 2023. This high-quality and fast-growing portfolio translates into a compelling upside for IPO investors. Analysts believe that MREIT has the potential to become the highest-paying REIT on the Philippine Stock Exchange, thanks to its long expansion pipeline and partnership with Megaworld.
5. Megaworld's Unrivaled Expertise
As the largest inventory of leasable office spaces in the country, Megaworld is a dominant force in the real estate market. With plans to launch 100,000 square meters of office spaces annually, Megaworld aims to expand its leasable area to 2 million square meters within the decade. Furthermore, Megaworld boasts the most number of PEZA-accredited office buildings among major property developers today. By investing in MREIT, you gain access to Megaworld's industry-leading expertise and the potential to benefit from its continued success.
In conclusion, MREIT presents a compelling investment opportunity for those looking to gain exposure to the real estate market. With its prime assets, unmatched growth potential, high-quality tenants, attractive dividend yield, and partnership with Megaworld, MREIT is well-positioned to provide investors with a solid and rewarding investment experience. Don't miss out on the chance to be a part-owner of these prestigious office buildings. Invest in MREIT and unlock the potential of the Philippine real estate market.
Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Always do your own research and consult with a professional financial advisor before making any investment decisions.
