MANILA, Philippines — Newly-listed Filinvest REIT Corp. (FILREIT) saw its earnings grow in the first half, as call centers, which accounted for majority of its tenants, show their resilience in the face of a lingering pandemic.
In a disclosure to the stock exchange Monday, the real estate investment trusts (REIT) company of the Gotianun family reported a net income of P1.05 billion in the January-June period, up 8% year-on-year.
Josephine Gotianun-Yap, company chairperson, said the profits growth puts FILREIT “on track” to meet its target distributable income, which is used by REIT firms when determining the dividends to be rewarded to shareholders. Under the law, 90% of REITs’ income from their property assets must be distributed to investors in the form of dividends.
This, in turn, stoked buying pressure for FILREIT. As of 11:18 a.m. Monday, the company’s shares were trading up 3.07%.
FILREIT said its topline stood at P1.96 billion while costs and expenses were “kept” at P863 million. Net income was likewise boosted by “lower provisioning for taxes” after FILREIT offloaded projects from its balance sheet and transferred them to its parent firm, Filinvest Land Inc., during the creation of the REIT firm.
But Gotianun-Yap said it is FILREIT’s “resilient” business process outsourcing (BPO) tenants that should take most of the credit for the bottom line growth. As of end-June, BPOs occupied 90% of FILREIT’s portfolio, which consists of 17 Grade A office buildings in Alabang and Cebu City totaling over 300,000 square meters of gross leasable area.
“We are pleased with the results of our first-half performance considering the general economic climate,” Gotianun-Yap said.
Despite its healthy balance sheet, FILREIT said it was not spared from the coronavirus onslaught. At the end of first half, FILREIT’s occupancy rate fell to 89%, a decline that the company “anticipated and forecasted” as online casinos, also known as Philippine Offshore Gaming Operators (POGOs), leave the country in droves as taxmen run after them to augment the state’s pandemic war chest.
The exodus shrank FILREIT’s POGO tenancy to 1.5% by the end of second quarter, from the previous quarter’s 2.8%, financial results showed. The company said BPOs are taking up the spaces vacated by POGOs, although renewed lockdowns in the capital are causing “delays” in the takeover.
As it is, FILREIT’s small exposure to POGOs made it highly attractive to investors. During its market debut last week, its share price closed up 0.29%, a modest finish but a relatively impressive performance considering that its predecessors — Ayala Land Inc.’s AREIT Inc. and DoubleDragon Properties Corp.’s DDMP REIT Inc. — made lackluster market debut amid a pandemic-induced volatility.