C08299-2023

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)
Nov 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 2,368,606,573
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

AREIT, Inc. (“AREIT”) acquisition of land from Buendia Christiana Holdings Corp. ("BCHC"), a wholly owned subsidiary of ACEN Corporation (PSE: "ACEN") via property-for-share swap.
Background/Description of the Disclosure

AREIT and BCHC will execute a property-for-share swap whereby AREIT will issue 199,109,438 primary common shares (the “Shares”) to BCHC in exchange for industrial land with an aggregate size of 2,759,135 square meters (sq.m.) located in Zambales (“Property”) valued at P6,769,720,892.00 (the “Transaction”), at P34.00 per share (“Transaction Price”), set at a 3.75% premium over AREIT’s 30-day VWAP of P32.77 or the Market Price.


"Market Price" means the volume-weighted average of the closing prices for a period of thirty (30) Trading Days prior to the transaction or the date of the approval of the Board of Directors on November 16, 2023
Date of Approval by Board of Directors Nov 16, 2023
Details of the Acquisition or Disposition
Date TBA
Description of the Assets Involved

276-hectare parcel of industrial land located in Zambales
Details of the Assets
Type (land, building, etc.) Location Size Rights Acquired (Ownership/ Leasehold etc.)
Industrial land Zambales 2,759,135 sqm Freehold
Terms and conditions of the transaction
Contract price, valuation and the methods used to value the assets

Transaction Price: Approximately P6.77 Billion, equivalent to 199,109,438 primary common AREIT shares at P34.00 per share.

Valuation Method: The Discounted Cashflow ("DCF") Approach was used as the primary method to estimate the fair value of the AREIT shares and Properties. The Comparable Public Companies Method and the Volume Weighted Average Price Method 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.

The Transaction Price was set at a 3.75% premium over AREIT’s 30-day VWAP of P32.77 or the Market Price, within the price range provided by FTI Consulting’s Fairness Opinion and Cuervo Appraisers, Inc.’s Appraisal Report.
Terms of payment

The shares shall be issued in BCHC’s name and the land’s ownership will be transferred to AREIT upon the Securities and Exchange Commission (SEC)’s approval of BCHC’s subscription of AREIT shares.
Conditions precedent to closing of the transaction, if any

The SEC approval of BCHC’s subscription of AREIT shares.
Any other salient terms

AREIT shall apply for the additional listing of the Shares with 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
Buendia Christiana Holdings Corp. Buendia Christiana Holdings Corp.a wholly-owned subsidiary of ACEN Corporation (PSE: ACEN)
Discussion on the probable impact of the transaction on the business, financials and other aspects of the REIT

The Property is expected to contribute to operating cashflows and increase the dividends per share upon approval. It will provide a guaranteed, stable stream of cashflows over the next 25 years and an annual escalation of 1.5%, valued at a 6.92% capitalization rate. Compared to AREIT’s estimated yield of 6.3% from its existing assets, it is dividend accretive based on the swap price of P34 per share.

AREIT will reach a total building gross leasable area of 762 thousand sq.m. and leased industrial land of 286 hectares at an aggregate Assets-Under-Management (AUM) value of P93 billion upon transaction completion.

The infusion of BCHC’s industrial land into AREIT’s existing portfolio of malls, offices, and hotels further diversifies AREIT’s leasing portfolio and reduces asset sector concentration risk.

Upon issuance of AREIT shares in exchange for the land, Giga Ace 8, Inc., a wholly-owned subsidiary of ACEN, will lease the land from AREIT for 25 years at a guaranteed fixed rent with annual escalation and with the option to renew for another 25 years.
Other Relevant Information

AREIT and BCHC will execute the Deed of Exchange and apply for the approval of the issuance of the shares with the SEC within March 2024 and the issuance of the Certificates Authorizing Registration ("CAR") with the relevant Bureau of Internal Revenue ("BIR") Revenue District Office within the third quarter of 2024.

Both parties expect to receive the SEC's approval of the transaction within the third quarter of 2024 and the BIR's CAR issuance within the fourth quarter of 2024. Hence, the PSE’s approval of the additional listing of the primary common AREIT shares with the exchange is expected to be within the second and third quarters of 2025. As such, the said shares can be transacted by ACEN only after the approval of the listing of the shares by the second or third quarter of 2025.

Meanwhile, the income from the asset shall accrue to AREIT at the beginning of the quarter upon SEC approval, expected in the third quarter of 2024. AREIT will ensure it complies with the minimum public ownership regulatory requirements.

This disclosure was amended to clarify the timeline for listing the shares.
Filed on behalf by:
Name Brandon Ryan Lim
Designation Investor Relations Associate