Property developer Filinvest Land Inc (FLI) is expanding the real estate investment trust (Reit) universe in the Philippines as its transitions its wholly-owned subsidiary Cyberzone Properties Inc (CPI) into a Reit company. Following the approval of its board of directors, FLI says CPI is intended to be listed on the Philippine Stock Exchange (PSE) in compliance with the minimum public ownership requirements under the Philippine securities regulations and the Reit Act of 2009, as well as its implementing rules and regulations.
FLI is one of the pioneer providers of office space to the business process outsourcing (BPO) industry in the Philippines and currently has 43 operating and under construction office buildings covering over 824,000 sqm of gross leasable area.
According to a PSE filing on January 21, FLI says a certain number of operating office buildings, including buildings leased out to traditional and multinational BPO companies, will comprise the property portfolio for the Reit company.
These office buildings are located in Northgate Cyberzone in Filinvest City, Alabang and Filinvest Cyberzone Cebu in Cebu City. Northgate Cyberzone in Filinvest City is an 18.7-hectare business park registered with the Philippine Economic Zone Authority (PEZA) and designed to cater primarily to BPO companies. It is home to the Philippines’ largest district cooling system to-date that helps reduce energy consumption, provides greater efficiency, lowers the initial capital investment, reduces carbon dioxide emissions and enhances real estate value by freeing up building space for other uses.
Filinvest’s BPO buildings have continued to be fully operational during the Covid-19 pandemic, and CPI’s office rental revenues increased by 16% year-on-year in the first nine months of 2020 to 2.46 billion pesos (US$51.25 million).
Commenting on the proposed Reit listing, FLI president and CEO Josephine Gotianun-Yap says: “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. 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.”
Ayala Land, one of the country’s largest property developers, listed the first Philippine Reit (AREIT) in August 2020 after completing its 13.6 billion pesos initial public offering (IPO). Another property developer DoubleDragon Properties announced in November last year the filing of a registration statement with the Securities and Exchange Commission covering the IPO of DDMP REIT, which is expected to raise 14.71 billion pesos.