C04012-2021

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)
Jun 8, 2021
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
AyalaLand REIT, Inc.
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 1,025,656,435
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”), Westview Commercial Ventures Corp. (“WCVC”), and Glensworth Development, Inc. (“GDI”)
Background/Description of the Disclosure

At the special meeting of the Board of Directors of AREIT (or the “Company”) held last March 16, 2021, and the annual stockholders’ meeting of AREIT held last April 23, 2021, the Board of Directors and AREIT’s stockholders approved the issuance of 483,254,375 primary common shares of stock in the Company (the “Shares”) to ALI, WCVC, and GDI, at an issue price of Php32.00 per share in exchange for identified properties valued at Php15,464,140,000.00 (“Transaction”). The Shares will be issued out of the increase in AREIT’s authorized capital stock to Php29.5B, which was also approved by the Board of Directors of March 16, 2021, and the Company’s stockholders on April 23, 2021.

On June 8, 2021, AREIT, ALI, WCVC, and GDI executed the Deed of Exchange in implementation of the Transaction.
Date of Approval by Board of Directors Mar 16, 2021
Details of the Acquisition or Disposition
Date Jun 8, 2021
Description of the Assets Involved

Vertis North commercial development - 125,507.39 sq. meters of leasable space and a retail podium of 39,305.76 sq. meters. The three office buildings are 97% occupied and are leased to large BPO locators including Google Services Philippines, Teleperformance, Telus and Global Payments. The retail component is operated by a wholly-owned subsidiary of ALI under the Ayala Malls brand.

Evotech Buildings 1 and 2 - 23,723.27 sq. meters of leasable office space. The buildings are 100% occupied and leased to Concentrix CVG Philippines and IBM Business Services.

Bacolod Capitol Corporate Center - 11,313.14 sq. meters of leasable office space and 100% occupied by ARB Call Facilities.

Ayala Northpoint Technohub - 4,653.50 sq. meters of leasable office space and 100% occupied by Iqor.

Office condominium units at BPI-Philam Life Buildings in Makati and Alabang - 1,623 sq. meters of leasable space. 100% occupied and leased to Oberthur Card Systems in Makati and Amaia Land in Alabang.
Details of the Assets
Type (land, building, etc.) Location Size Rights Acquired (Ownership/ Leasehold etc.)
Building North Avenue, North Triangle, Quezon City 39,305.76 sqm (Retail)125,507.39 sqm (Offices) Ownership
Condominium Units 19th Floor, Ayala Life FGU Center, 6811 Ayala Avenue, Makati City 1,072 sqm Ownership
Condominium Units 7th Floor, BPI-Philam Alabang, Alabang-Zapote Road corner Acacia Avenue, Muntinlupa City 551 sqm Ownership
Building North Capitol Drive corner Aguinaldo Street, Bacolod City 11,313.14 sqm Ownership
Building The District North Point, Barangay Zone 15, Talisay City 4,653.50 sqm Ownership
Building Lakeside Evozone, Nuvali, Sta. Rosa, Laguna 12,049.16 sqm Ownership
Building Lakeside Evozone, Nuvali, Sta. Rosa, Laguna 11,674.11 sqm Ownership
Terms and conditions of the transaction
Contract price, valuation and the methods used to value the assets

Properties valued at Php15,464,140,000.00 in exchange for 483,254,375 common shares (“AREIT shares”) at an exchange price of Php32.00, which are all within the price range indicated in the Fairness Opinion issued by PwC – Isla Lipana Co., and the Appraisal Reports issued by Asian Appraisal Company, Inc.

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, PwC discounted the cashflows of AREIT and the properties based on a weighted average cost of capital (WACC) using the Capital Asset Pricing Model. The Direct Capitalization Approach and Market Approach were also used as secondary methods to cross-check the value of the properties and the value of AREIT shares, respectively.
Terms of payment

The shares shall be issued in the names of ALI, WCVC, and GDI, and the properties transferred upon approval of the Securities and Exchange Commission of the increase in authorized capital stock of AREIT, and the subscription of ALI, WCVC, and GDI 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 increase in authorized capital stock of AREIT, and subscription of ALI, WCVC, and GDI 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 increase in authorized capital stock with the PSE. The majority vote representing the outstanding shares held by the minority stockholders present and represented in the annual stockholders’ meeting 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, WCVC, and GDI, 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 50.14% (directly and indirectly) of AREIT
Westview Commercial Ventures Corp. An Ayala Land, Inc. fully-owned Subsidiary
Glensworth Development, Inc Fully-owned Subsidiary of AyalaLand Offices, Inc. (ALO); ALO is 100% owned by Ayala Land, Inc., and directly owns 9.39% of AREIT
Discussion on the probable impact of the transaction on the business, financials and other aspects of the REIT

As the first Philippine REIT which successfully listed amidst the pandemic, AREIT aspires to further grow its leasing portfolio with prime and stable assets. The Swap will increase AREIT’s portfolio from 344,000 square meters to 549,000 square meters of gross leasable area; increase AREIT’s assets under management from PhP37B to Php52B; and at the transaction price of Php32 per share, the assets to be infused are yield accretive to AREIT at a capitalization rate of 6%.
Other Relevant Information

AREIT shall seek approval of the SEC on the increase in authorized capital stock and the subscription of ALI, WCVC, and GDI of shares in exchange for the properties to be transferred to AREIT. Upon approval of the SEC of the increase in its authorized capital stock and the property-for-share swap among AREIT, ALI, WCVC, and GDI, the Parties shall apply for the Certificate Authorizing Registration with the BIR, and the listing of the additional shares with the Philippine Stock Exchange, within the year.
Filed on behalf by:
Name Michael Blase Aquilizan
Designation Associate Manager