GOTIANUN-LED Filinvest REIT Corp. (FILRT) is diversifying its portfolio into the retail mall segment after a P6.26-billion property-for-share swap deal with its parent company and sponsor Filinvest Land, Inc. (FLI) for a mall in Muntinlupa City.
FLI will transfer ownership of the 121,862 square-meter (sq.m.) main mall of Festival Mall in Alabang to FILRT in exchange for 1.63 billion FILRT primary common shares at P3.85 per share, FLI said in a regulatory filing on Monday.
The deal was approved after the respective board meetings of FILRT and FLI on Jan. 24.
This marks the inclusion of a retail mall into FILRT’s portfolio, which previously comprised 17 office buildings and 2.9 hectares of land leased to the owner and operator of Crimson Resort & Spa Boracay.
Upon infusion, FILRT’s portfolio mix will consist of 67% offices, 6% hospitality, and 27% retail.
The deal will boost the gross leasable area of FILRT’s portfolio by 37% to 452,310 sq.m., while the occupancy rate will grow to 88% from 83%.
The property-for-share swap also boosts FLI’s holdings in FILRT to 63.27% from 51.06% post-transaction.
FILRT said in a separate statement that the issuance price was set at a 30% premium over its 30-day volume-weighted average price of P2.94 per share, within the fair value price range given by Leechiu Property Consultants and FTI Consulting.
“This move fulfills the commitment made by our sponsor FLI to continually support the growth and expansion of our REIT portfolio through the infusion of high-quality income-generating real estate assets,” FILRT President and Chief Executive Officer Maricel Brion-Lirio said.
“At the same time, we remain true to our investment thesis of sustainable practices in the leasing business, with Festival Mall being partially supplied by renewable energy through the solar panels installed atop the mall,” she added.
The deal is still subject to regulatory approval and will be presented for approval at a special stockholders’ meeting of FILRT on March 4.
FLI and FILRT will execute a lease agreement for the property once approved by the Securities and Exchange Commission.
In December, FLI created room for further asset infusions after expanding its public float to 46.68% from the previous 34.48%.
The company increased its public float following a capped voluntary tender offer via a share swap in exchange for FILRT shares.
On Monday, FLI stocks rose by 4.29% or three centavos to 73 centavos apiece, while FILRT shares gained by 1.95% or six centavos to P3.14 per share. — Revin Mikhael D. Ochave
