Filinvest REIT seals more office leasing deals in Q1

Filinvest Reit Corp., the real estate investment trust (Reit) of the Gotianun-led Filinvest Group, on Wednesday said it has finalized 10,300 square meters in new lease deals as of the first quarter.

Maricel Brion-lirio, the company’s president and CEO, said this is more than double the new leases that the company signed for the entire 2022.

“The tenants that signed are a mix of multinational BPO [business process outsourcing] and traditional companies,” Lirio said during the company’s annual stockholders’ meeting.

“We are happy to note that tenants are starting to come back and pushing forward with their expansion plans. We are hopeful that this is a sign of reversal from the challenge we faced last year due to the implementation of hybrid work setups in PEZA special economic zones like our North Gate Cyberzone property in Alabang,” Lirio said.

The new deals complement the 5,087 square meters in leases Filinvest REIT sealed last year, and the 22,891 square meters in renewed leases, about 96 percent of which are expiring this year.

“Weighted average lease expiry or ‘whale’ is 6.9 years and is forecast to increase in 2023 as new leases and renewals for the year set in,” Lirio said in her report to shareholders.

She said Filinvest REIT is focused on diversifying its portfolio to boost dividends for its shareholders while improving the revenues of existing prime office assets.

“We expect our portfolio to benefit from intrinsic and organic growth as building occupancy improves.”

Lirio noted that contractual escalation terms are built into about 90 percent of Filinvest REIT’S office leases, averaging 5 percent per annum.

“Our inorganic growth potential is backed by the right of first refusal that sponsor Filinvest Land Inc. [FLI] has granted to Filinvest REIT. This covers all significant commercial properties owned by FLI and its wholly owned subsidiaries. FLI has about 465,000 square meters of office and more gross leaseable area in the CBDS [central business districts] that are potential acquisitions for Filinvest REIT,” Lirio said.

“Other asset classes may also be added to FILREIT coming from the commercial projects of the Filinvest Group. Our sponsor FLI is fully committed to grow FILREIT’S portfolio with regular asset infusions.”

The company closed 2022 with a profit of P1.31 billion and rental and other revenues of P3.24 billion.

Filinvest REIT posted an average occupancy of 89 percent last year.