Shares of VistaREIT Inc. (VREIT), the real estate investment trust (REIT) of Villar-led Vista Land and Lifescapes Inc., were unchanged at P1.75 per share during its trading debut on the Philippine Stock Exchange (PSE) on Wednesday.
VREIT braved the over-all market selloff due to negative sentiments. Its shares opened weak at P1.73 and went to as low as P1.59 apiece, before late-buying efforts hiked its offer price to P1.75 per share.
“VREIT had a relatively warm reception during its listing and would have finished much higher if not weighed by market sentiment as a whole, with the PSEi already drifting towards oversold territory. Investors bought up the shares, as the company aims to ‘maintain high occupancy rates and quality tenants with particular focus on those offering essential goods and/or services’,” Luis Limlingan, managing director at Regina Capital Development Corp. said in a research note.
The benchmark PSE index plunged 155.11 points to close at 6,319.42 points.
PSE President Ramon S. Monzon said VREIT may be the smallest REIT listing on the PSE so far in 22 months in terms of capital raised, but it offered the highest dividend yield of an estimated 8.25 percent this year to 8.99 percent for 2023.
“This is likely the reason why it now counts among its shareholders local small investors from 42 provinces, seven countries and two overseas territories. VREIT will be using the P4.8 billion of its IPO [initial public offering] proceeds to invest in 12 high-rise and medium-rise mixed-used condominium projects and five mixed-use developments,” Monzon said.
VREIT is the first to list on the PSE with mostly shopping malls in its portfolio. It has 10 community malls and two Philippine Economic Zone Authority-registered office buildings with an aggregate gross leasable area of 256,403.95 square meters.
These two buildings boast of a 98-percent and 91-percent occupancy rate for its Bonificio Global City location and Molino office building, respectively, with tenants in the business process outsourcing sector, Monzon said.
Manuel Paolo A. Villar, VREIT president, said the company is sticking to its plan of offering elevated mall and office experience to tenants and customers.
“In a market now characterized by pandemic and requisite recovery efforts, we know we are in the best position to serve the market hungry for mall and office experiences and simply essentials,” Villar said during the opening ceremony.
Monzon said he now considers REITs as a major platform to raise capital.
He said when the first REIT was listed on the Philippine Stock Exchange in August 2020, he considered it then as an alternative asset class vis-à-vis common and preferred stocks, and corporate and government bonds.
“However, the six REITs that have listed so far in the PSE in the last 22 months have generated solid enough returns that I no longer view REITS as an alternative class but as a core asset class,” Monzon said.
“Believe it or not, the total capital raised by the seven REITs that listed in the PSE has exceeded P90 billion, proving that the REIT is a successful platform for capital raising.”