C07004-2023

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Sep 20, 2023
2. SEC Identification Number
CS200613870
3. BIR Tax Identification No.
006-346-689
4. Exact name of issuer as specified in its charter
AREIT, Inc.
5. Province, country or other jurisdiction of incorporation
Makati City, Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
28/F Tower One and Exchange Plaza, Ayala Ave. Makati City Postal Code 1226
8. Issuer's telephone number, including area code
(+632) 7908-3804
9. Former name or former address, if changed since last report
N/A
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common Shares 1,761,047,193
11. Indicate the item numbers reported herein
Item 9 - Other Matters

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

AREIT, Inc.AREIT

PSE Disclosure Form REIT-4 - Acquisition or Disposition of Assets
References: Rule 5 of the IRR of the REIT Act of 2009 and
Section 6 of the Amended PSE Listing Rules for REITS

Subject of the Disclosure

Property-for-Share Swap between AREIT, Inc. (“AREIT”) and Ayala Land, Inc. (“ALI”), Ayalaland Malls, Inc. (“ALMI”), and Northbeacon Commercial Corporation (“NBCC”)
Background/Description of the Disclosure

Please be informed that AREIT, Inc. (AREIT or the Company) received today the Securities and Exchange Commission’s (SEC) approval of its property-for-share swap with Ayala Land, Inc. (ALI), Ayalaland Malls, Inc. (ALMI), and Northbeacon Commercial Corporation (NBCC) (ALMI and NBCC are referred to herein collectively as “Subsidiaries”) involving identified prime flagship offices and malls with an aggregate value of Php22,479,697,060.00 in exchange for ALI and the Subsidiaires’ subscription to 607,559,380 primary common AREIT shares pursuant to the Deed of Exchange dated 02 June 2023.

AREIT will apply for the Bureau of Internal Revenue Certificate Authorizing Registration for the new assets and the listing of the shares in favor of ALI and its subsidiaries within the first quarter of 2024.

Attached is the press release on the approval of the property-for-share swap transaction for your reference.
Thank you.
Date of Approval by Board of Directors Mar 7, 2023
Details of the Acquisition or Disposition
Date Jun 2, 2023
Description of the Assets Involved

Glorietta BPO 1 and 2 - 60,632.84 sq. meters of gross floor area composed of two (2) BPO buildings, Glorietta BPO 1 with seven (7) storeys and Glorietta BPO 2 with eight (8) storeys.

One Ayala West Tower - 59,014.19 sq. meters of gross floor area composed of an eighteen (18)-level PEZA-accredited office development.

One Ayala East Tower - 58,351.01 sq. meters of gross floor area composed of a twenty-three (23)-level PEZA-accredited office development.

Glorietta 1 & 2 Mall - a four(4)-storey commercial development redeveloped in 2013 with a gross floor area of 68,763.84 sq. meters.

Marquee Mall - a three (3)-level commercial development with a gross floor area of 66,041.04 sq. meters.
Details of the Assets
Type (land, building, etc.) Location Size Rights Acquired (Ownership/ Leasehold etc.)
Glorietta BPO 1 and 2 - Building Ayala Center Makati 60,632.84 sqm Owned
Building Ayala Center Makati 59,014.19 sqm Owned
Building Ayala Center Makati 58,351.01 sqm Owned
Regional Mall Ayala Center Makati 68,763.84 sqm Owned
Regional Mall Angeles City, Pampanga 66,041.04 sqm Owned
Terms and conditions of the transaction
Contract price, valuation and the methods used to value the assets

Properties valued at Php22,479,697,060.00 in exchange for 607,559,380 common shares (“AREIT shares”) at an exchange price of Php37.00, set at a 3% premium over the 30-day VWAP of P35.83 or the Market Price (PSE Consolidated Listing and Disclosure Rules defines “Market Price” as the volume weighted average of the closing price for a period of thirty (30) trading days prior to the approval of the transaction. Transaction date refers to the approval of the Board of Directors when issue price was set, or the meeting of the Board of Directors on March 7, 2023) which are all within the price range indicated in the Fairness Opinion issued by FTI Consulting, and the Appraisal Reports issued by Cuervo.

The assets were valued using the Discounted Cashflows (“DCF”) Approach as the primary method to estimate the fair value of the AREIT shares and the Properties. Under the DCF approach, FTI Consulting discounted the cashflows of AREIT and the Properties based on a weighted average cost of capital (WACC) using the Capital Asset Pricing Model. The Comparable Companies Approach and Precedent Transactions Approach were used as secondary methods to cross-check the value of the AREIT shares. The Direct Capitalization Approach was used to cross-check the value of the Properties.
Terms of payment

The shares shall be issued in the name of ALI, ALMI, and NBCC, and the Properties transferred to AREIT upon approval of the Securities and Exchange Commission of the subscription of ALI, ALMI, and NBCC of AREIT shares in exchange for the Properties.
Conditions precedent to closing of the transaction, if any

Approval of the Securities and Exchange Commission of the subscription of ALI, ALMI, and NBCC of AREIT shares in exchange for the Properties.
Any other salient terms

The property-for-share swap will qualify as a tax-free exchange under Section 40(C)(2) of the Tax Code.

The Company shall likewise apply for the additional listing of the shares resulting from the Transaction with the PSE. The majority vote representing the outstanding shares held by the minority stockholders present and represented in the annual stockholders’ meeting of AREIT last April 26, 2023 was likewise obtained for the issuance of the waiver of the requirement to conduct a rights or public offering of the shares to be subscribed by ALI as part of the requirements of the PSE.
Identity of the person(s) from whom the assets were acquired or to whom they were sold
Name Nature of any material relationship with the Issuer, their directors/ officers, or any of their affiliates
Ayala Land, Inc. Ayala Land, Inc. is the sponsor of AREIT, and owns 66% (directly and indirectly) of AREIT
Ayalaland Malls, Inc. ALMI is a wholly-owned subsidiary of ALI.
Northbeacon Commercial Corporation NBCC is a wholly-owned subsidiary of ALI.
Discussion on the probable impact of the transaction on the business, financials and other aspects of the REIT

Since its IPO, AREIT has exceeded its growth plans, resulting in a 52% total shareholder return based on the closing
price of P35.85 on 06 March 2023. The Company started with 153 thousand sqm, equivalent to P30 billion in Assets Under Management (AUM) in 2020. By December 2021, the Company has grown to 549 thousand sqm, equivalent to P53 billion in AUM. Today, the Company stands at 673 thousand sqm, equivalent to P64 billion, more than double since it was listed on the Exchange. This new infusion in 2023 will almost triple the Company's AUM to P87 billion and boost its GLA more than five-fold to 863 thousand sqm from the IPO, making AREIT one of the largest and the most diversified commercial REIT in the Philippines.
Other Relevant Information

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Filed on behalf by:
Name Brandon Ryan Lim
Designation Investor Relations Associate