August 14, 2022 – Filinvest REIT Corp. (FILRT), the flagship commercial REIT of the Filinvest group, posted a net income of ₱706 million in the first half of 2022 on the back of rental and other revenues of ₱1.64 billion. Comparing the second quarter results from the first quarter of 2022, rental income improved by 2 percent to ₱784 million as a result of a slight improvement in average occupancy. However, higher costs and expenses, primarily utilities, led to a lower net income of ₱324 million in the second quarter compared to ₱382 million in the first quarter of 2022.
“We are in a period of transition in the office leasing business following the re-opening of the economy and the new trend of work on site and work at home hybrid setup. Many of our locators’ expansion plans were still on hold during the first half of the year although we continued to lock in the expiring leases,” said FILRT president and chief executive officer Maricel Brion-Lirio. As of the end of the first half of 2022, FILRT has renewed and signed about 20,380 square meters or 86 percent of the leases expiring in 2022. Only a small 4 percent did not renew and the balance of 10 percent is under negotiation with a high probability of renewal.
Aside from the lease renewals, FILRT had new signed leases in the second quarter of 2022 totaling 4,150 square meters coming from the BPO sector and a flexible space facility provider. The lease terms range from 5 to 10 years which is a good indication of the locators’ long-term confidence in the company. “We are encouraged to see locators starting to come back but what we are observing is that they are expanding on a smaller scale and a slower pace. BPO companies, which comprise 91% of our tenant base, continue to lead the demand but they are still taking a wait-and-see attitude before they pursue their major expansion plans,” added Ms. Brion-Lirio. FILRT posted an average rate of 88 percent occupancy in the first half of 2022, almost sideways from the first quarter, but with the second quarter marginally higher than the previous quarter.
On August 9, 2022, FILRT declared its third quarterly cash dividend this year amounting to ₱0.088 per outstanding common share. This declaration brings year-to-date dividends to ₱0.316 per outstanding common share which is equivalent to an annualized yield of 6.2% based on the market price on August 9, 2022 of ₱6.78 per share. The cash dividends will be payable on September 20, 2022 to stockholders on record as of August 31, 2022.
FILRT’s portfolio consists of 17 Grade A office buildings totaling over 300,000 square meters of gross leasable area (GLA) valued by an independent appraisal company at ₱48.5 billion. Of these, 16 of the 17 buildings are in Northgate Cyberzone in Filinvest City in Alabang, a PEZA Special Economic Zone and IT park while another building is located in the gateway of Cebu IT park in Lahug, Cebu City.
