Mall remains king as developers favor retail

Property developers remain bullish on malls over office developments, anticipating stronger consumer demand driven by benign inflation and continued wage hikes. The optimism is expected to boost earnings in the retail segment.

AP Securities noted that a risk-averse investment environment makes allocating capital to dividend-paying stocks more attractive.

In line with this, the boards of Filinvest Real Estate Investment Trust (FILRT) and Filinvest Land Inc. (FLI) recently approved a property-for-share swap.

The deal involves transferring ownership of Festival Mall’s main building from FLI to FILRT in exchange for newly issued FILRT shares.

The transaction, valued at P6.26 billion, will be executed through the issuance of 1.63 billion FILRT shares at P3.85 per share — a 30 percent premium over FILRT’s 30-day volume-weighted average price of P2.94.

Upon completion, FILRT’s overall portfolio will expand by 37 percent, from 330,448 square meters to 452,310 square meters. Additionally, the company’s occupancy rate will improve from 83 percent to 88 percent.