Gotianun-led Filinvest Land Inc. (FLI) is planning an initial public offering (IPO) for a new real estate investment trust (REIT) that will hold its portfolio of leasable assets catering to the business process outsourcing (BPO) sector.
FLI’s board of directors has approved the transition of its wholly owned subsidiary, Cyberzone Properties Inc. (CPI), into a REIT company and later bring this unit to public hands.
“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. 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,” FLI president and CEO Josephine Gotianun-Yap said.
REIT is a new asset class that gives investors the option to invest directly in finished products that are already earning money, such as residential and office rental units, hotels, hospitals, shopping malls or even infrastructure ventures. This is meant to attract investors because the REIT law requires the distribution of at least 90 percent of income as dividends annually.
This instrument allows sponsor-developers to recycle capital for further property development and expansion initiatives. All proceeds from any REIT offering are required to be reinvested locally within one year.
Filinvest is one of the pioneer providers of office space in the BPO industry and currently has 43 operating and under construction office buildings covering over 824,000 square meters of gross leasable area.
A number of operating office buildings, including those leased to traditional and multinational BPO companies, will comprise the property portfolio of the REIT company. These office buildings are located in Northgate Cyberzone in Filinvest City, Alabang, and Filinvest Cyberzone Cebu in Cebu City, based on the disclosure.
Filinvest’s BPO buildings have continued to be fully operational during the pandemic. CPI’s office rental revenues increased by 16 percent year-on-year at end-September 2020 to P2.46 billion.
Last year, the first Philippine REIT, Ayala Land-backed AREIT Inc., completed a P13.6-billion IPO, attracting strong interest from investors long thirsting for a new asset class that pitches high dividend yields.
Other property developers like DoubleDragon Properties and Robinsons Land Corp. have likewise indicated plans to sponsor REIT companies and list them on the Philippine Stock Exchange.
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