Filinvest’s REIT headed for P14.9-B public debut

Gotianun-led Filinvest Land Inc. (FLI) has spun off its business process outsourcing office (BPO) property assets, mostly in Northgate Cyberzone in Alabang, into a real estate investment trust (REIT) that seeks to sell as much as P14.9 billion worth of shares through an initial public offering (IPO).

FLI plans to offer up to 1.63 billion secondary common shares in Cyberzone Properties Inc. (CPI), which will be renamed Filinvest REIT Corp., for as much as P8.30 per share. About 163.42 million additional shares will be up for sale as part of an overallotment option.

Pioneer

CPI is one of the pioneer BPO office space providers in the country. Its REIT portfolio consists of 16 office towers, one of which has a retail component in Northgate Cyberzone in Filinvest City, Alabang. CPI also owns one office tower with a retail component in Cebu City.

Filinvest REIT is landlord to 301,362 square meters of leasable space. Its total property assets are valued at P36.99 billion, based on the prospectus submitted to the Securities and Exchange Commission (SEC).

Based on the pro-forma financial statement for 2020, Filinvest REIT posted P1.61 billion in net income out of P2.78 billion in revenues. Return on equity was at 30.1 percent.

The property assets in the portfolio are projected to generate P1.98 billion in gross revenues this year and then P4.27 billion in 2022.

REIT, a relatively new asset class in the local market, refers to a corporation that primarily invests in income-generating real estate such as office spaces, shopping malls, service apartments, hotels, hospitals and warehouses. It gives investors an opportunity to invest directly in the finished projects rather than in the developer itself. This asset class is meant to attract dividend-seeking investors because the REIT law requires the distribution of at least 90 percent of income as dividends annually.

For a REIT sponsor like FLI, this new asset class allows the property developer to recycle capital for further property development and expansion initiatives.

Third listing

This will be the third REIT listing in the country after the recent IPO of DoubleDragon Meridian Park (DDMP) REIT of DDMP Properties and that of Ayala Land-sponsored AREIT Inc.’s last year.

A registration statement for the offering has been filed at the SEC, FLI said in a disclosure to the Philippine Stock Exchange on Friday.

At the maximum price, Filinvest REIT’s proposed offering is bigger than DDMP REIT’s P14.7 billion and AREIT’s P13.6 billion.

FLI and CPI have mandated BPI Capital Corp. to act as joint global coordinator, bookrunner and underwriter and UBS AG Singapore Branch as the joint global coordinator and bookrunner.