Filinvest REIT mulls portfolio diversification, expansion

Buoyed by the expected spike in tenant leases, Filinvest REIT Corp., the flagship commercial REIT of the Filinvest Group, is bullish on further expanding its portfolio this year to sustain growth momentum.

In a stock report on Tuesday, the company reaffirmed its strategic plan to diversify its tenant mix with traditional tenants and co-working locators.

“The new leases that we have in 2024 have been encouraging and we are optimistic that leasing activities will improve further in the second half of the year,” FILRT President and CEO Maricel Brion-Lirio said.

“Despite some challenges in the market conditions, we remain committed to expanding our portfolio and steadfast in our goal to significantly increase dividends for our shareholders in the long term,” she added.

Last year, FILRT sealed new lease agreements totaling 20,139 square meters, including a 2,630-square-meter expansion for two BPO companies. This marked a substantial increase compared to the 5,087 square meters leased in 2022.

As part of FILRT's diversification strategy, the new leases also comprised 4,512 square meters allocated to traditional tenants. These leases were negotiated at rates above prevailing market rates in Alabang, according to the Colliers report.

Reflecting the company's commitment to tenant retention, 77 percent (31,835 square meters) of the 41,110 square meters of expiring leases in 2023 were renewed.

FILRT's current tenant mix consists of 78 percent multinational BPO companies, 11 percent traditional office and co-working spaces, 11 percent hospitality establishments, and a small percentage dedicated to retail tenants. Notably, FILRT has zero exposure to POGO operators.

On Tuesday, the FILRT Board of Directors approved the dividend declaration to all stockholders amounting to P0.067 per outstanding common share.

The cash dividends will be payable on 26 March to stockholders on record as of 11 March. This first quarterly cash dividend declaration for the year translates to an annualized yield of 8.3 percent based on the previous trading day’s closing price of P3.23 per share.

Based on unaudited financial statements, FILRT recorded a net income of P1.05 billion in 2023.

Excluding the net fair value change in investment properties, FILRT posted a net income of P1.28 billion on the back of rental and other revenues of P3 billion.