Filinvest REIT Corp. Reports 7% Increase in Income, Expands Tenant Base Amid Hybrid Work Shift

Strategic Insights -

Filinvest REIT Corp., the real estate investment trust of the Gotianun Group, has seen a 7% expansion in income to P601 million in the first half of the year, compared to P561.3 million in the previous year. Despite a contraction in revenues to P1.4 billion, a 11% drop from last year's P1.58 billion, the company attributes this to the overhang of the temporary drop in occupancy in the first quarter due to the rightsizing of some tenants brought about by hybrid work. However, this was partially offset by a 3% drop in cost and expenses to P643 million. The company's portfolio of 17 office buildings and one resort lot had an average occupancy of 79% in the first half, lower than the average occupancy of 84% in the same period last year.

Key Takeaways:

  • The company's income in the first half expanded by 7% to P601 million, resulting from deliberate efforts in rebuilding the tenancy of its office buildings.
  • Revenues for the period reached P1.4 billion, a contraction of 11% from last year's P1.58 billion, due to the temporary drop in occupancy in the first quarter.
  • Cost and expenses dropped by 3% to P643 million, partially offsetting the decline in revenues.
  • Filreit has been rebuilding its portfolio's occupancy, with average occupancy rising to 81% by the end of June.
  • The company has been transitioning into having a 'more balanced' tenant base by signing new traditional companies to replace BPO tenants that have downsized.
  • Filreit remains ahead of competition in Alabang, where 16 of its 17 buildings are located, with occupancy higher than the market's 73%.
  • One-third of new leases were signed at the upper end of the range (P500 to P750 per square meter) in Alabang.
  • Over 26,204 square meters or 46% of expiring leases for 2024 have already renewed, while another 16,270 square meters or 29% are awaiting finalization of the renewal contract.
  • Filreit has deliberately diversified its tenant mix, with the addition of traditional tenants and co-working locators, making up 76% of the total tenant mix.

Statistics:

  • P601 million: Filreit's expanded income in the first half.
  • P1.4 billion: Revenues for the period, a 11% drop from last year.
  • P643 million: Cost and expenses, a 3% drop from last year.
  • 79%: Average occupancy of Filreit's portfolio in the first half.
  • 84%: Average occupancy of Filreit's portfolio in the same period last year.
  • 81%: Average occupancy of Filreit's portfolio by the end of June.
  • 73%: Alabang market occupancy, as reported by Colliers International.
  • 13,126 square meters: New leases signed by Filreit.
  • 20,742 square meters: Letters of intent for new leases.
  • 26,204 square meters: Square meters of expiring leases for 2024 that have already renewed.
  • 16,270 square meters: Square meters of expiring leases for 2024 awaiting finalization of the renewal contract.

Sources:

  • Filinvest REIT Corp. reports 7% increase in income - no specific date mentioned.
  • Filreit website:

https://www.filinvestreitcorp.com/