ORTIGAS LAND Corp. is preparing its estates and planning to launch two more as it aims to enter the capital market in the next five years.
“If we plan to do an initial public offering (IPO), I would like to see six estates from four and hopefully show the market that we also can expand by another two,” Ortigas Land President and Chief Executive Officer Jose Emmanuel H. Jalandoni told reporters last week.
“What we need to do now is of course fix some of our estates. Some of them are already a bit dated like Greenhills, so we are doing a bit of redevelopment,” he added.
Mr. Jalandoni said, “[We want to] prove to the market that we can execute. We are doing well with Capitol Commons; we need to prove to the market that we can redevelop Greenhills in a proper way.”
According to Mr. Jalandoni, the company is not yet sure whether it will pursue a company listing or a real estate investment trust (REIT).
“It could be either, we can do both. It depends on what our advisors will tell us, but we’re preparing for both so we will just decide whether it’s this or that,” he said.
“We have enough commercial space for a decent REIT market capitalization. I think we will have around 200,000 square meters (sq.m.) of office space and 300,000 sq.m. of commercial malls. I think it’s big enough for us to do a REIT,” he added.
According to analysts, the main issue in the listing is the timing. Analysts say that Ortigas Land should wait for the market to be more favorable.
“It is a timing issue when market conditions are favorable, in terms of selling the shares at the highest price possible from the perspective of the sellers or issuers,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Separately, Luis A. Limlingan, head of sales of Regina Capital Development Corp., said, “It depends on what interest rates are doing at the time so it can also be a timing issue too.”
According to Mr. Limlingan, the kind of listing Ortigas Land will pursue, will depend on the company’s future strategy.
“If they plan to invest in projects earning rental income or management fees, then REITs would be more ideal. Also, if they are focusing on a specific sector — retail, office, etc. — then REITs might be a better alternative,” he said.
“If in the medium term they are looking to grow their landbank then maybe another fund-raising route might be better suited,” he added.
Meanwhile, Mr. Ricafort said that choosing to put up a REIT will give greater flexibility to the company and its investors.
“REIT would give greater flexibility for issuers and investors on the type of real estate used as underlying asset that would effectively allow investors to become lessors through dividend yields set without the hassles related to managing the leased property,” Mr. Ricafort said. — Justine Irish D. Tabile