FILRT acquires Festival Mall in P6.26 billion property-share swap

MANILA, Philippines — Filinvest Land Inc. (FLI), the Gotianun family’s listed property developer, is selling its flagship Festival Mall in Alabang to the group’s real estate investment trust in a P6.26-billion property-for-share swap transaction.

In a stock exchange filing, FLI said that it would enter into a property-for-share swap with Filinvest REIT Corp. (FILRT) to increase its equity in the latter to 63.27 percent from 51.06 percent.

Under the transaction, FLI will transfer its ownership over Festival Mall to FILRT in exchange for the latter’s 1.63 billion primary common shares at an issue price of P3.85 per share.

“This transaction fulfills FLI’s commitment as the sponsor of FILRT to continually support the growth and expansion of the REIT portfolio through the infusion of high-quality income generating real estate assets,” the company said.

Located in Muntinlupa, Festival Mall has a gross leasable area of 121,862 square meters.

FLI said that Leechiu Property Consultants appraised the property, while FTI Consulting provided a fairness opinion.

The transaction price, meanwhile, was set at a 30 percent premium over FILRT’s 30-day volume weighted average price of P2.94 per share, within the price range of fair value provided by FTI Consulting’s fairness opinion and LeeChiu Property Consultants’ valuation report.

The primary common shares to be issued by FILRT to FLI will come from the unissued common shares of FILRT, which will be subject to shareholders and regulatory approvals.

FLI and FILRT will execute a lease agreement for the property upon approval of the transaction by the Securities and Exchange Commission.

FILRT is a REIT company of which FLI is the sponsor.

FILRT is aiming to double its gross leasable area and diversify its assets through asset infusions from FLI and parent firm Filinvest Development Corp.

The company is also targeting to reach an occupancy rate of 95 percent before 2026, driven by tenant diversification.