THE government Service Insurance System (GSIS) has acquired an 8.18% stake in the real estate investment trust (REIT) of Gokongwei-led Robinsons Land Corp. (RLC) as the government agency bolsters its investment portfolio.
GSIS now owns 877.43 million common shares of RL Commercial REIT, Inc. (RCR), equivalent to an 8.18% stake, the listed REIT said in a stock exchange disclosure on Tuesday.
The deal has an estimated value of over P4.3 billion using RCR’s stock price of P4.95 apiece on Tuesday.
“Jose Arnulfo A. Veloso, GSIS president and general manager or his representative, has the sole power to vote/direct the voting or dispose/direct the disposition of said shares,” RCR said.
“For the past 60 days, GSIS acquired a total of 790.22 million common shares of RCR,” it added.
The announcement came as RLC recently sold 1.73 billion common shares of RCR to “high-quality long-only institutional investors” at P4.92 apiece worth P8.5 billion. The move increased RCR’s public float to 49.95% from the previous 33.86%.
According to RLC, the deal allows RCR to obtain accretive assets from the property developer’s pipeline of investment properties.
“Investing in REITs would benefit GSIS by providing them a recurring source of dividend income,” COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan said in a Viber message.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said that the move by GSIS is a “good long-term investment in a top quality REIT.”
“Based on its acquisition price, GSIS will enjoy a high dividend yield of around 8% with the potential for growth as more yield-accretive assets are infused into RCR,” Mr. Colet said.
“They are number two in terms of market capitalization,” he added.
As of Tuesday, RCR has a market capitalization of P53.1 billion at P4.95 per share. The company has 10.73 billion outstanding shares.
Ayala-led AREIT, Inc. has the highest market capitalization among REITs at P78.05 billion.
AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message that the entry of GSIS would bode well for the company’s stock price.
“RCR has been one of the underperformers in the REIT space, with -8.8% total returns (capital gains plus dividends) since listing. The entry of GSIS could provide the much-needed vote of confidence in the stock that could turn the price action around,” Mr. Garcia said.
“Looking at the broader picture, this recent spate of deals in the REIT segment could be indicative that the worst is over for dividend-yielding securities in particular and for equities in general. While the Bangko Sentral ng Pilipinas is still maintaining its hawkish tone, it seems that GSIS is already positioning for the advent of easier monetary policy and lower risk-free returns,” he added. — Revin Mikhael D. Ochave
