FLI sees rosy future

Inspite of the uncertainties and difficulties posed by the pandemic, one company seems to be relatively doing quite well.

Filinvest Land Inc. (FLI), one of the country’s largest property developers and a pioneer in providing modern office spaces to business process outsourcing (BPO) companies in the country, recently reported that its office leasing revenues grew to P5.56 billion last year or eight percent higher compared to P5.17 billion in 2019.

FLI managed to maintain its recovery trend in the last quarter of 2020 despite challenges posed by the sustained community quarantines around the country. In fact, it reported a 50 percent increase in residential revenues at P3.17 billion in the fourth quarter of 2020 from P2.12 billion in the third quarter.

Company officials said that a strong recovery was seen in mall revenues in the fourth quarter as it rose by 66 percent compared to the third quarter, as Metro Manila and other cities moved to the less restrictive general community quarantine.  Mall foot traffic also doubled in the fourth quarter compared to the third quarter of 2020.

However, for the whole of 2020, mall rental revenues registered a 55 percent drop to P828 million due to the quarantine restrictions, especially in the earlier part of the year.

Overall, proceeds from office leasing cushioned FLI’s recurring income from both retail and office leasing business from the impact of the pandemic, ending the year with a slight nine percent drop in aggregate rental revenues to hit P6.39 billion in 2020.

The second quarter was heavily impacted by construction restrictions during the quarantine period and the implementation of Bayanihan 1 and 2 deferment of customer payments.

But starting with the third quarter, the company experienced an upward trend which continued to the last quarter. Major growth drivers during the period included improved demand for the affordable and the middle-income housing segment, as key areas moved to less restrictive quarantine impositions (GCQ and MGCQ), resumption of construction, and normalized buyer amortizations. The company likewise saw a healthy rebound in residential reservation sales, seen as one of the fruits of Filinvest’s initiatives towards accelerated digital transformation.

FLI president and CEO Josephine Gotianun Yap explained that their recognition of the need for agility amid unprecedented times can be seen in their swift and deliberate efforts to implement health and safety protocols across all their developments, resulting in their stakeholders’ peace of mind.

She said that the company’s digital transformation played a critical role in ensuring continued sales support, customer service communications, and financial operations, adding that their contactless transactions and customer service channels, as well as their aggressive digital marketing strategy, buoyed the company’s recovery.

FLI’s full year 2020 gross revenues went down by 32 percent to P17.49 billion, with residential revenues declining by 42 percent to P9.84 billion. Net income attributable to equity holders was likewise lower by 41 percent at P3.73 billion in 2020 from P6.28 billion in 2019.

But Gotianun Yap maintained that Filinvest is no stranger to crises as it has weathered several economic and political upheavals in the past. She said that the company’s recovery was a result not only of pandemic-reactive measures, but also to a greater extent, of solid decisions made many years ago, in particularl lessons learned from previous crises.

She said that with the light of vaccinated hope, they remain optimistic that the recovery trend they have seen in the last quarter of 2020 would be sustained well in 2021 as the company maintains its priority in serving the needs of its stakeholders while keeping its employees safe and healthy.

In November 2020, FLI successfully raised P8.1 billion for its capital expenditure program through the issuance of three and 5.5-year peso fixed-rate bonds which attained the highest PRS Aaa rating from the Philippine Rating Services Corp., and even had an oversubscription of P1.35 billion over the base amount of P6.75 billion.

For this year, FLI officials said that the company is focusing on the completion of its key office building projects, the development of Phase 1 of the Filinvest Innovation Park in New Clark City, and the continued rollout of its lower density Aspire and Futura urban mid-rise buildings, as well as housing residential developments across the country.

The company’s growth this year is expected to be bolstered by the property giant’s entry into the real estate investment trust (REIT) market, complemented by the steadfast expansion of its residential and recurring income business. FLI’s office leasing portfolio has delivered stable revenues and managed to grow despite the COVID-19 pandemic, according to Gotianun Yap.

FLI has 31 operational office buildings and 11 buildings under construction that will be completed in the next two years, with a total gross leasable area of over 750,000 sqm strategically located in Metro Manila, Clark, and Cebu.

The company has filed a registration statement with the Securities and Exchange Commission (SEC) covering its REIT initial public offering. The REIT will initially cover 17 buildings mostly located in Northgate Cyberzone, a PEZA-accredited business hub in Filinvest City, Alabang, Muntinlupa. Gotianun Yap said that the buildings have the unique advantage of being within Filinvest City, the first LEED-certified CBD in the Philippines and the largest in Southeast Asia that has attained LEED Gold in Sustainable Neighborhood Development.

Meanwhile, FLI also announced that it intends to continue supporting its retail tenants by granting rental concessions to help them sustain their businesses amidst the pandemic.

RCI sticks to strategy

Publicly listed Roxas and Company, Inc. (RCI), the holding company of the Roxas Group, will continue to enhance its existing strategy of selling non-essential assets, reducing debt, and growing its core businesses.

RCI’s main holdings are raw real estate in Nasugbu, Batangas; sugar-related assets and business held through Roxas Holdings Inc.; and real estate development through its property arm Roxaco Land Corp.

The past two years has seen the Roxas Group implementing these strategies, which included selling raw land to major property developers Sta. Lucia Land and SM Prime Holdings to deleverage and enhance the value of its Nasugbu, Batangas landbank.

Last year, RCI and its subsidiaries sold key non-performing assets to reduce its overall debt. The group sold its property in Cubao (land and building), as well as raw land to the National Grid Corp. of the Phils. (NGCP) for its Calaca-Nasugbu transmission line project. It also signed a put option agreement for a maximum commitment of P800 million as a fund-raising option, and restructured existing loan agreements totaling P2.9 billion to provide much-needed stability and working capital to maintain and grow its operations.

Company officials revealed that for their hospitality ventures, Go Hotels remains a quarantine facility while Anya Resort in Tagaytay continues to be an off-city relaxation/staycation option. Meanwhile, its coconut processing subsidiary, Roxas-Sigma Agriventures, Inc., achieved double digit revenue growth for the third straight year and is providing high-quality products for export while at the same time uplifting local farmers and its supply chain partners.

It was also disclosed that RCI is currently pursuing major sale and joint venture deals in relation to its land holdings. RCI also had some major organizational changes last year due to the retirement of its president/CEO and the appointment of Edgar Arcos as its OIC-general manager and CFO. RCI remains confident that under its new leadership, there will be continuity in implementing its overall strategy and best efforts are being exerted to achieve and even surpass the targets set for this year.

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