Festival Mall Alabang to bulk up Filinvest REIT
The real estate investment trust (REIT) arm of Filinvest Land Inc. (FLI) will add the 27-year-old Festival Mall Alabang into its portfolio in a P6.26-billion property-for-share swap seen to help diversify its assets.
In a regulatory filing on Monday, Filinvest REIT Corp. (FILRT) said it would issue 1.63 billion primary common shares to its REIT sponsor at P3.85 each, or a 25 percent premium over its closing price of P3.08 last Friday.
This will increase FLI’s shareholding in FILRT to 63.27 percent from 51.06 percent currently.
In return, FLI, the real estate business of conglomerate Filinvest Development Corp. (FDC), will turn over Festival Mall-Main Mall in Filinvest City, Muntinlupa to FILRT. The mall has a gross leasable area of 121,862 square meters.
“This transaction fulfills FLI’s commitment as the sponsor of FILRT to continually support the growth and expansion of the REIT portfolio through the infusion of high-quality income generating real estate assets,” FLI said in a separate disclosure.
Companies injecting new assets into their REITs is seen to help diversify the latter’s portfolio and potentially boost profitability.
At the same time, the shares received from the swap deal can be a long-term investment, with the company benefiting from potential share price appreciation.
This comes amid FLI’s plans to launch more projects outside Metro Manila as investors and potential homeowners look to other regions for investment.
Last November, FLI broke ground for a new township in Iloilo province, where it expects to generate P1.8 billion in sales.
The 11.4-hectare Iloilo Central will stand in the municipality of Leganes and house residential units, commercial spaces and retail pods.
FLI has likewise finalized preparations for a P12-billion bond offer to beef up its expansion war chest.
The issuance will consist of up to three subseries: five-year bonds due 2030, seven-year bonds due 2032 and 10-year bonds due 2035.
FILRT booked a 13.3-percent increase in its new leases during the January to September 2024 period, driven by multinational clients in Northgate Cyberzone.
