Filinvest Getting Into the 'REIT' Business
Filinvest Land Inc. is set to get into the real estate investment trust (REIT) business when it turns its wholly owned subsidiary Cyberzone Properties Inc. (CPI), into an REIT company that will be listed in the Philippine Stock Exchange.
CPI’s office buildings that will be transitioned into REITs 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 PEZA-registered business park 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.
According to Filinvest in a filing with the PSE, its BPO buildings have continued to be fully operational during the COVID-19 pandemic, with CPI’s office rental revenues increasing 16 percent year-on-year in the first nine months of 2020 to P2.46 billion.
Filinvest is a conglomerate owned and controlled by the Gotianun family with interests in real estate development and leasing, hotel and resort management, banking and financial services, sugar and power. It currently has 43 operating and under construction office buildings covering over 824,000 square meters of gross leasable area.
“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,” FLI President and CEO Josephine Gotianun-Yap said. “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’s AREIT was the first to be listed in the PSE in TK. Other real estate companies have expressed their intention to follow suit, including DoubleDragon's DD Meridian Park, and at least 's 25 office buildings under Robinsons Land.
What are REITS
REITs are essentially corporations that manage real estate assets that produce regular income such as hotels, apartment buildings, office and commercial buildings, and shopping malls. According to the Securities and Exchange Commission, besides providing real estate companies a cheaper source of capital and promoting economic development, growth in tourism and liquidity in the capital markets, REITs allow both small and large investors to participate in the direct ownership of real estate and is an alternative investment instrument to foreign investors as well as OFWs.