Filinvest eyes adding malls, hotels to REIT portfolio

MANILA, Philippines — Gotianun-led Filinvest Land Inc. is looking to grow the portfolio of its nascent real estate investment trust (REIT) beyond call center offices in a bid to fund future expansion plans.

At the right time, Filinvest REIT Corp. would add malls and hotels in its portfolio which currently only comprises of office buildings, 16 of which are located inside Northgate Cyberzone in Alabang while the other one is in an IT park in Cebu.

“Actually, Filinvest’s plan is to use FILREIT as vehicle for all future REITs. Moving forward, we’re not limiting the portfolio to office leasing,” Ana Venus Mejia, Filinvest Land chief finance officer, said in an interview with Philstar.com on Monday.

“Later on when the time is good, we have a pipeline of assets — a combination of existing and under-construction (projects). So these assets we have the malls and hotels. Of course not now because we're still in a pandemic. So when the timing is good, we can infuse them to the REIT,” she added.

Filinvest REIT is also looking to include industrial and logistics assets on its portfolio, Mejia said, but she added that these ventures are still in “gestation.”

"Our intention right now is to only have one REIT company, which is the Filinvest REIT," she said.

On Monday, Filinvest Land announced that the local bourse already greenlighted its REIT company’s P14.9-billion initial public offering set to begin on July 26 until August 3. For its offer, Filinvest REIT would sell 1.6 billion common shares to the public for the first time at a maximum price of P8.30 each, with an option to sell an additional 163,418,785 shares if there’s robust investor appetite for the offer.

The tentative listing date is set on August 12.

For Beatrice Lopez, equity analyst at Regina Capital, Filinvest REIT’s offer price is cheap enough to lure buyers. “It’s discounted relative to the fair value so investors may find it attractive even at the maximum price,” Lopez said in a Viber message.

Filinvest REIT’s parent will receive all the proceeds from the share sale, which would be spent on construction of office buildings, residential mid-rise buildings and industrial warehouses, as well as raw land acquisition. Some portion will also go to capital expenditures for retail malls and the expansion of the district cooling system in Northgate Cyberzone.

In turn, at least 90% of income from these ventures are required to be declared as dividends with shareholders. For this year, Filinvest forecast gross rental income to hit P2.15 billion for the entire 2021 that, if realized, would be down from P2.83 billion recorded in 2020 after the company booked lower rental earnings in the first quarter of this year.

“With our over 400 hectares of prime central business district land nationwide, the proceeds to be received by FLI can fuel the growth of its projects,” Mejia said. “In the event any of these new developments are infused into the REIT, we believe such infusion will in turn add to the liquidity and size of REIT company going forward.”

On Monday, shares in Filinvest Land went up 1.75% to finish at P1.16 apiece.