Filinvest REIT Corp. Diversifies Portfolio Through Festival Main Mall; Grows GLA by 37%

​The respective Board of Directors of Filinvest REIT Corp. (FILRT) and its sponsor, Filinvest Land, Inc. (FLI), both approved the proposed property-for-share swap between the two parties, wherein FLI will transfer the ownership of the main mall building of its flagship Festival Mall in exchange for newly subscribed primary shares of FILRT, subject to regulatory approvals.

​The transaction involves the 121,862-square meter (GLA) main mall of Festival Mall in Filinvest City, Alabang, Muntinlupa City, for the subscription of 1,626,003,316 primary common shares of FILRT, at P3.85 per share, or equivalent to P6.26 billion. The issuance price was set at a 30 percent premium over FILRT’s 30-day VWAP of P2.94 per share, within the fair value price range provided by FTI Consulting and LeeChiu Property Consultants.

Post-transaction, FILRT will increase its total portfolio by 37 percent to 452,310 square meters while improving occupancy from 83 percent to 88 percent. The properties' Weighted Average Lease Expiry (WALE) will also extend from 7.3 years to 14.6 years.

FILRT will also be able to diversify its income sources by integrating retail mall properties into its portfolio. Upon infusion, FILRT’s portfolio mix will comprise of 67 percent offices, 6 percent hospitality (Crimson Boracay lot), and 27 percent retail (Festival Main Mall).

“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,” said Maricel Brion-Lirio, President and CEO of FILRT. “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 continued.

On the other hand, FLI will increase its holdings in FILRT from the current 51.06 percent to 63.27 percent post-transaction, creating opportunities for the sponsor to improve dividend income. The transaction is expected to be dividend accretive to both FLI and FILRT.

Festival Mall met all the investment criteria set forth by FILRT in determining which assets to infuse, including (1) a property with high and stabilized occupancy; (2) that is located in a key Central Business District (CBD) in Metro Manila; as well as (3) being a prime-grade property that possesses a key sustainability feature.

Sustainability and protecting the environment are part of the core values of the Filinvest group. Festival Mall has been installed a 2.8 MW solar rooftop solution that supplies about 28 percent of the mall’s peak demand and saves close to 41,000 Tons of CO2, equivalent to removing 8,855 cars off the roads of Metro Manila annually. This solar power project, apart from the benefit of reducing power costs at Festival Mall, allows the mall to reduce its carbon footprint.

This is in line with FILRT’s eco-conscious efforts in property management, which boasts a 100 percent use of renewable energy in all buildings within Northgate Cyberzone in Alabang, with seven EDGE-certified and two LEED-certified assets. FILRT’s sustainability goals align with the sustainability goals of global brands and offer an attractive option for companies focused on reducing their environmental impact.

The property-for-share swap shall be subject to the approval of pertinent regulatory bodies and will be presented for approval in a special stockholders’ meeting of FILRT set on March 4, 2025. Upon approval of the transaction by the SEC, FLI and FILRT shall execute a lease agreement for the property.

Filinvest REIT Corp. (FILRT) is a real estate investment trust (REIT) company whose sponsor is Filinvest Land, Inc., one of the largest property developers in the Philippines with an established portfolio of residential, office, retail and industrial developments around the country.

FILRT was publicly listed on the Philippine Stock Exchange on 12 August 2021 as the Philippines’ first sustainability-themed REIT. Its original portfolio consists of 17 Grade A and LEED Gold certified office buildings which include green and sustainability-themed features. An addition to the portfolio is 2.9 hectares of land that is being leased to the owner and operator of Crimson Resort & Spa Boracay.

Totaling over 330,000 square meters of gross leasable area, 16 of the buildings are in Northgate Cyberzone in Filinvest City in Alabang. Filinvest City is a 244-hectare mixed-use and integrated city that is the first and only central business district in the Philippines to receive LEED® (Leadership in Energy and Environmental Design) v4 Gold for Neighborhood Development Plan certification as well as a three-star BERDE (Building for Ecologically Responsive Design Excellence) certification. Another building is Filinvest Cyberzone Cebu Tower 1 located in the gateway of Cebu IT Park in Lahug, Cebu City.