MREIT. Developers' Shift Toward Leasing Assets Plays to MREIT's Strengths

Highlights

• Ayala Land, Megaworld, SM Prime and Robinsons Land cut their aggregate 2026 capex 25% and are redirecting spending from housing to investment properties, the asset class MREIT holds.
• At ₱13.36, MREIT trades about 0.5% above its 52-week low even as its own payouts keep rising.
• Vini Research Desk rates MREIT a Buy, ~19% upside to our ₱15.90 fair value.

The Setup

S&P Global's October review of Southeast Asian property found that the decline in Philippine property sales narrowed to 7% year on year in the first half of 2026, from an 11% contraction in 2025. Ready-for-occupancy inventory in Metro Manila remains high, and developers are pivoting to affordable provincial housing. The top four developers also trimmed their combined 2026 capex budget by 25% from initial plans, with spending moving from residential development to investment properties. MREIT last traded at ₱13.36, near its 52-week low of ₱13.30 set on Sep. 18, 2026, after a 3.33% slide over the past month amid net foreign selling. Our momentum read on MREIT is Neutral.

Source: news article

Our Read

The housing glut is not MREIT's problem, but the capex shift is its opportunity. MREIT has no residential exposure and serves as Megaworld's listed leasing vehicle, so sponsor capital flowing into offices, malls and hotels deepens the pipeline it can draw from. That starts with the ₱27-billion Wave 5 infusion, which brings in lifestyle malls, Grade A offices and a hotel.

Vini Research Desk rates MREIT a Buy, seeing about 19% upside to our fair value of ₱15.90. A sponsor that is prioritizing leasing assets supports both future dividend growth and capital appreciation for MREIT, which benefits holders of the Passive Income Plan.

What We're Watching

• 3Q26 results and dividend declaration in November
• Closing of the Wave 5 asset-for-share swap and the MREIT shares issued for it
• Office occupancy trends as sponsors add investment properties