I attended the webinar sponsored by COL Financial this afternoon and it was great to hear updates regarding AREIT straight from the CEO, Carol Mills. Fortunately, COL shared it on Youtube:

The highlight, of course, is AREIT’s planned asset infusions for next year. This includes a solar farm in Zambales; Seda hotels in Cebu and Palawan; the Holiday Inn in Makati; office building Ayala Triangle Gardens T2; and shopping malls Greenbelt 3 and 5. This is by far the most diverse set to be infused in a single year and pretty much includes all 4 traditional properties: office, retail, hotel and industrial.

There was a lot to unpack but a few things stood out for me. First is that AREIT considers itself as a regional player. It aims to reach AUM of around $3 billion so it can attract investors that would normally look at larger REITs listed in Singapore or Hong Kong. It wants to grow large and is delivering on that goal. This is why it continues to infuse assets every year, regardless of the stock price being low. Growing would also mean acquiring assets from the larger Ayala Group, s shown by the solar farm infusion from ACEN.

Carol also shed light on the effect of transferring assets from Ayala Land into AREIT – it is neutral to Ayala Land. It neither gains nor looses money in doing so. It literally just transfers a property from its left hand to the right hand. This also means that it can do this indefinitely, as long as Ayala Land continues to create and develop estates in the Philippines. She mentioned the case for One Ayala, the transit based development along EDSA and Ayala Ave., which was completed using the proceeds from AREIT’s IPO 3 years ago. Portions of it have now been infused into AREIT, contributing to its rental income. AREIT has a long growth runway. It currently only has half of its sponsors’ offices and just a quarter of its hotels and malls.

Lastly, it remains commited to growing dividends. This is not only based on contracted rental escalations and ensuring a high occupancy. They make sure that all succeeding asset infusions are dividend accretive. The market usually has a negative reaction when AREIT announces asset infusions since it causes share dilution. While this is true, that is not what we should look at. I don’t care if my shares are diluted as long as the dividend per share that I receive is maintained or increased. AREIT has done so since its IPO. As a long term income investor, I also don’t look at the stock price drop as something bad, just a great opportunity to buy more quarterly dividend paying REIT shares.