Andrew Tan Tan built his fortune developing large apartment complexes around Manila and now has a … [+] business empire that spans food, beverage, gaming and real estate.
Courtesy of Andrew Tan
Megaworldthe developer controlled by billionaire Andrew Tanis spinning off some of its office properties into a real estate investment trust that would raise 27.3 billion pesos ($565.5 million) from an initial public offering, joining the IPO bandwagon of other real estate tycoons.
Megaworld is selling 49% of MREIT through the IPO. MREIT plans to sell up to 1.24 billion common shares at a maximum price of 22 pesos apiece, according to registration documents filed with the Securities and Exchange Commission on Wednesday.
Through a property-for-share swap, Megaworld injected into MREIT a portfolio of ten office, retail and hotel assets with an aggregate gross leasable area of 224,430 square meters. The propertieslocated in Megaworlds townships near the Makati central business district, suburban Quezon City and Iloilo City in central Philippinesare primarily leased to business process outsourcing (BPO), or call center companies, according to MREIT.
Our tried-and-tested signature concept of the township has attracted over 200 BPO and multinational companies to locate with us through the years since we started our first-ever Eastwood cyberpark in 1999, said Kevin Tan, President & CEO of MREIT. Kevinthe eldest son of Megaworld founder and chairman Andrew Tanis also the chief strategy officer of Megaworld.
Tan, 71, was ranked the Philippines sixth-richest individual with a net worth of $3 billion when the Worlds Billionaires List was published in April. The son of a factory worker, Tan built his fortune developing large apartment complexes around Manila and now has a business empire that spans food, beverage, gaming and real estate.
Megaworld has been developing townships in the past two decades and claims to be the largest office landlord in the country with around 1.4 million square meters of office properties across 10 major cities in the country. In 2020, the company generated over 10 billion pesos of rental revenues from these properties.
Megaworlds rivals have also been cashing in on the booming demand for office space among BPOs. Robinsons Land Corp.controlled by billionaire Lance Gokongwei and his siblingsplans to raise up to 26.7 billion pesos from the listing of RL Commercial, while Filinvest Landowned by tycoon Mercedes Gotianunis reportedly raising 13.6 billion from the IPO of its office REIT.
AREITthe countrys first listed REIT owned by billionaire Jaime Zobel de Ayalas Ayala Landis also focused on office properties that cater to BPO operators. Last week, Ayala Land agreed to inject 15.5 billion pesos worth of such properties into AREIT.
Demand for space remains strong as more BPO operators set up shop in the Philippines, said Jonathan Ravelas, chief market strategist of BDO Unibank. BPOs were resilient during the pandemic.
