Filinvest to establish own REIT

MANILA, Philippines — The Gotianuns are joining the Ayalas in the "REIT" party.

In a disclosure to the stock exchange on Thursday, property giant Filinvest Land Inc. announced plans to transform Cyberzone Properties Inc. — a subsidiary — into a real estate investment trust (REIT) company, the target listing date of which is yet to be disclosed.

Investors welcomed the news. On Thursday, shares in Filinvest rallied 2.68% to close at P1.15 each.

Under Filinvest's plan, the soon-to-be REIT firm's portfolio will include BPO office buildings in Northgate Cyberzone in Filinvest City, Alabang and Filinvest Cyberzone Cebu in Cebu City. Filinvest currently has 43 office buildings that are "operating and under construction" with combined gross leasable area of over 824,000 sqm.

"We are looking forward to listing CPI as a REIT company because we believe that this will unlock the value of our office leasing business," Josephine Gotianun-Yap, company president and chief executive, said.

If the plan succeeds, the Filinvest-backed REIT firm would be the second of its kind in the country. Last year, Ayala Land Inc.-controlled AREIT Inc. became the Philippines' first ever REIT company since an enabling law was enacted in 2009 and debuted on the local bourse despite pandemic-induced volatility.

REIT has a record of being a successful investment vehicle in countries like Singapore. As a publicly-owned listed company, REIT is tasked to use proceeds from share sale to purchase and manage income-generating property assets such as malls, offices and warehouses. At least 90% of income from these ventures are required to be declared as dividends with shareholders.

That said, choosing to include BPO offices in the planned REIT firm's portfolio might be a good decision. According to Filinvest, its BPO buildings continued to operate despite the pandemic, pushing up Cyberzone Properties' rental revenues to P2.46 billion in the first 9 months of 2020, up 16% year-on-year.

"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. A REIT listing will enable acceleration of the growth of this business line,” Gotianun-Yap said.