FLI expands rental portfolio, cuts residential inventory

Property developer Filinvest Land Inc. (FLI) aims to insulate itself from a potential downturn in the residential property segment by building up a P190 billion worth of investment portfolio that provides substantial recurring revenue.

But while it is expanding its investment portfolio, the challenging environment caused by the coronavirus pandemic has prompted the property firm to halve the new residential inventory it would bring to the local market this year from the original target of P30 billion.

In a report during the company’s annual stockholders meeting on Thursday, FLI chief executive officer Josephine Gotianun-Yap said expanding the rental portfolio was part of the strategy to brace for the COVID-19 crisis.

“Close to half of our revenues come from our rental or investment properties. We will continue to grow this segment. Based on an international appraisal company, our existing investment portfolio and those under construction are valued at P190 billion.” Gotianun-Yap said.

Rental revenues accounted for 48 percent of FLI’s business in 2019. Fair market value of existing investment properties amounted to P128 billion while the value of those under construction are estimated at P62 billion, Gotianun-Yap said. The estimates are based on a third-party assessor’s valuation based on income approach for buildings and market value of land.

“The properties are carried in our books at a historical cost of P61 billion,” she said.

From 2014 to 2019, FLI has doubled rental revenues. FLI has been increasing its investments outside of Metro Manila, particularly in Cebu, Davao, Dumaguete and North Luzon, primarily through Clark Mimosa and New Clark City in Pampanga.