In less than two years since the Duterte administration issued in January 2020 the new implementing rules and regulations (IRR) for the Real Estate Investment Act of 2009, the Philippine REIT landscape has developed and flourished.
Two REIT companies have already listed on the Philippine Stock Exchange (PSE), successfully attracting stock market investors.
“The REIT listings we’ve had attracted a good number of retail investors, particularly Local Small Investors who use PSE EASy for their initial public offering subscriptions. We expect the upcoming IPOs and REIT listings to continue to support the growth in retail investors,” PSE president Ramon Monzon said.
Filinvest REIT CORP.
Investors can look forward to another REIT offering, this time from Gotianun-led Filinvest Land Inc.
Cyberzone Properties Inc. (CPI), a subsidiary of Filinvest Land, filed an application with the Securities and Exchange Commission (SEC) recently to list as a REIT, a company that owns and operates real estate assets to generate income from lease rentals.
In its Registration Statement filed with the SEC last March 25, 2021, CPI said it plans to be renamed into Filinvest REIT Corp.
Filinvest REIT Corp.’s portfolio is expected to consist of 16 office buildings clustered in the 18.7-hectare Northgate Cyberzone, a Philippine Economic Zone Authority (PEZA) Special Economic Zone in Filinvest City in Alabang, Muntinlupa; and one office tower with a retail component in Cebu Cyberzone in the gateway of Cebu IT park in Lahug City, Cebu.
Here are the salient points on the REIT offering as noted in Filinvest REIT Corp.’s registration statement filed with the Philippine SEC and FLI’s publicly available information:
Steady and Stable with over 90 percent Occupancy. The occupancy rate for the 17 buildings included in Filinvest REIT Corp.’s portfolio has remained steady at over 90 percent as of April 30, 2021, with ongoing negotiations for the balance.
Prime Quality with BPO Tenants Occupying 88 percent. Properties in Filinvest REIT Corp. portfolio have a total gross leasable area (GLA) of 301,362 square meters (sqm). Of the occupied GLA, prime multinational BPO companies account for 88 percent) while POGO tenants occupy less than 2.8 percent. The balance is occupied by traditional office and retail customers as of March 31, 2021.
Grade A Office Buildings. Northgate Cyberzone has been attracting high-quality tenants. Its office buildings have been rated Grade A by global real estate services firm JLL Philippines. In addition to its various supporting amenities, and FLI’s reputation as a trusted developer with over 50 years of experience, Northgate Cyberzone’s rental rates are also believed to be significantly lower than those in the central business districts of Makati and Bonifacio Global City in Taguig.
Pioneer in BPO Offices since 2001. Among the sponsors for upcoming REIT issues, FLI is one of the pioneers and has one of the longest track records in leasing office spaces to BPOs. Northgate Cyberzone is home to one of the earliest BPO campuses in the country: one of the first built-to-suit (BTS) commercial properties in the Philippines completed in 2004 with a 7,000-sqm space for a multinational global BPO firm. Another BTS was completed the following year with 18,000 sqm of space, the largest BTS at the time, for a global BPO of a multinational bank. To date, Northgate Cyberzone has the largest concentration of purpose-built BPO space by a single developer in the South Metro.
Steady Growth due to BPO Boost. CPI was able to sustain its revenues, primarily from its office leasing business, which increased by eight percent to P3.12 billion in 2020 compared with the previous year. This can be attributed to the resilience of the country’s BPO sector, said CPI President and CEO Maricel Brion-Lirio.
Unlock the Growth Potential of FLI. Filinvest REIT Corp. offers strong growth potential from inorganic sources. These are FLI’s deep portfolio and extensive CBD landbank in major hubs, including 315,000 sqm of office GLA and assets such as PBCom Tower in Makati, Axis 2 in Alabang, and Cebu Tower 2. It also has access to 250 hectares of extensive CBD land bank in Metro Manila, Clark, and Cebu that can potentially add 5.3 million sqm of additional GLA and over 140 hectares of land for industrial leasing and warehouse development.
Gold LEED® v4 Certified Neighborhood. Since its deliberate strategy to focus on the office segment eight years ago, Filinvest has transformed Filinvest City to become the first CBD in the Philippines to receive Gold Certification from LEED® v4 for Neighborhood Development Plan. Buildings inside Northgate Cyberzone are cooled by the country’s largest district cooling system that reduces carbon emissions and energy consumption—a result of Filinvest’s partnership with Engie, a world leader in developing sustainable technology solutions. The portfolio also includes LEED Gold certified buildings. These are the sustainability features sought after by multinational BPOs.
Growth Driver. After establishing a solid track record with the successful commercial development of Filinvest City in Alabang, FLI is seeking to replicate the model in other parts of the country, such as Filinvest Mimosa and Filinvest New Clark City in North Luzon, and City di Mare in Cebu.
“We are looking forward to listing Filinvest REIT Corp. because we believe that this will unlock the value of our office leasing business. Filinvest has a growing portfolio of recurring income projects and significant prime office properties in Alabang, Cebu, and Clark to continue to grow this business. This REIT listing will enable acceleration of the growth of this business line,” said FLI president and CEO Josephine Gotianun-Yap.
For more information on Filinvest REIT Corp., please visit http://www.filinvestreit.com.