Stock Commentary

Filinvest REIT declares cash dividend, plans to inject 3 buildings

Merkado Barkada
Filinvest REIT declares cash dividend, plans to inject 3 buildings

The Gotianun Family’s Filinvest REIT [FILRT 7.98 3.64%], subsidiary of Filinvest Land [FLI 1.12 0.88%]declared a P0.112/share cash dividend from its Q3 distributable income, payable on December 20 to its shareholders of record on December 3. The “ex-date” is November 29, which means that you must own this stock BEFORE November 29 in order to be considered a shareholder of record and receive the dividend. This Q3 dividend is the same as the one FILRT declared in Q2, and annualized, it’s projecting a yield of 5.53% based on its current price, and 6.40% based on the IPO price.

FILRT notes that the projected annualized yield based on its IPO price is actually greater than the projected 2021 yield that it provided in its REIT plan. FILRT also reiterated its intention to add three buildings to its portfolio within the next 12 to 18 months. The buildings have a combined gross leasable area (GLA) of 103,000 square meters; their inclusion would increase FILRT’s GLA by over 34%, and make FILRT the second-largest Philippine REIT (according to GLA), behind only RL Commercial REIT [RCR 7.32 0.14%] and its 425,315 square meters of GLA.


Thanks for listening, FILRT! Joke lang, but the company came out with this dividend announcement just two and half hours after my post yesterday about how FILRT was the last of the PH REIT bunch to distribute Q3 goodies. Good to see a consistent dividend, but I’m curious to see how this plays out for FILRT going forward, as FILRT’s Q2 dividend payment was 133% of its Q2 net profit, and its Q3 dividend payment was 85% of its Q3 net profit. Taken together, FILRT paid P1.096 billion in dividends on P1.059 billion in profits.

Expressing dividends as a percentage of net income is called a “payout ratio”, and while it’s totally normal and possible for REITs to pay out more than they make in a particular quarter (to maintain dividend consistency, for example), it’s something to keep an eye on over the longer-term, since it’s not possible for a company to (indefinitely) dividend more money than it makes. For now, though, it’s totally fine. Remember, the REIT Law says that a company must dividend at least 90% of its distributable income per year; this gives REITs some flexibility in terms of how they structure the dividend payments throughout the year, provided they always add up to more than 90% of the REIT’s distributable income for the year. I think this is kind of an interesting thing to track, so I’m going to add a “Payout Ratio” column to the MB REIT Tracker on Monday!



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