Filinvest REIT reduces IPO price

FILINVEST REIT Corp. (Filreit), the real estate investment trust company sponsored by property developer Filinvest Land Inc., has cut its offer price by 15 percent to P7 per share from the previous indicative price of up to P8.30 per share, according to a report by BusinessMirror.

At the said price, it also cuts its proceeds to just P12.55 billion from the previous P14.35 billion.

Broker Regina Capital Development Corp. said at its offer price of P7 apiece, its projected annualized dividend yield would be 6.27 percent for this year and 6.62 percent for 2022.

“These would be considerably higher than the average yield of AREIT Inc. and DDMP Reit Inc.,” Regina Capital said.

Filreit will be the third REIT company to be listed at the Philippine Stock Exchange after the sponsored firms of Ayala Land Inc. and Double Dragon Properties Corp.

“Despite ultimately being an office space lessor, Filreit’s rental income isn’t immune to pandemic downsides,” Regina Capital said. “The firm runs the risk of downsizing of certain smaller traditional tenants amid the lasting impacts of the recession.”

The broker added that “while majority of its lease contracts will likely remain stable for the year, we are projecting lower EBIT [earnings before interest and taxes] in 2021. Net income could still be stable this year in spite of this, however, assuming Filreit continues recognizing income tax benefits.”

Filreit, formerly known as Cyberzone Properties Inc., is set to offer 1.63 billion secondary shares and up to 163 million over-allotment option shares.

The offer period is scheduled on July 26 to August 3, 2021, while its tentative listing date at the PSE is on August 12, and will be traded under the stock symbol FILRT.

Filreit will offer 10 percent of its shares to local small investors.

The company’s portfolio consists of 17 office buildings on prime property totaling over 300,000 square meters of gross leasable area. The 16 buildings are located in Northgate Cyberzone within Filinvest City in Alabang while one is in the gateway of Cebu IT Park in Lahug, Cebu City.

Filreit’s sponsor, FLI, has 14 operational office buildings and 11 more under construction located in key central business districts that may form additional pipeline acquisitions for the company. These buildings are expected to total approximately 315,000 square meters of gross leasable area.

BPI Capital Corp. and UBS AG Singapore Branch are the joint global coordinators and bookrunners for the offer. BPI Capital is also the sole local coordinator and local lead underwriter while UBS AG Singapore Branch is the international bookrunner. China Bank Capital Corp. is a local lead underwriter while First Metro Investment Corp. and SB Capital Investment Corp. are local co-lead underwriters.

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“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” 

-Franklin D. Roosevelt

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