Filinvest REIT Corporation (FILRT), the flagship commercial real estate investment trust of the Filinvest group, reported a 20 percent drop in net income to P304 million in the first quarter of 2023 from P382.6 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said rental and other revenues dipped 2.7 percent to P801 million in the first three months of the year from P832 million generated in the same period of 2022.
On a sequential basis comparing the first quarter 2023 results from the fourth quarter of 2022, net income rose by 17 percent as a result of a 5 percent improvement in rental revenues and a 13 percent reduction in operating costs.
The successful acquisition of the 2.9 hectares of prime resort property that is being leased to Crimson Resort & Spa Boracay began contributing to FILRT’s income starting January 1, 2023.
“The infusion of the Boracay property is only a first step towards a more diversified portfolio for FILRT,” said FILRT President and CEO Maricel Brion-Lirio.
She noted that, “While it has now broadened FILRT’s income profile mix beyond office leasing and into the growing Philippine hospitality and leisure segment, we remain focused on further growing FILRT’s portfolio organically and with regular asset infusions.”
“We are guided by a clear investment strategy of increasing occupancy, cost management and asset acquisition to sustain the portfolio expansion and deliver stable and competitive return to our investors,” Brion-Lirio added.
Together with its fund management company, FREIT Fund Managers, Inc., FILRT is in the process of completing the due diligence and internal approvals of new asset infusions.
Amid the expansion plans, FILRT’s average occupancy rate in the first quarter of 2023 stood at 85 percent. Occupancy has been able to hold up compared to the estimated office industry’s average occupancy rate of 81 percent based on the Colliers first quarter 2023 Property Market Report.
Nevertheless, FILRT said it continues to finalize new leases and renew expiring contracts. As of the end of the first quarter, almost 10,300 square meters of new leases have signed Letters of Intent and Contracts of Lease.
On renewals, almost 17,200 square meters or 42 percent of the lease expiries for 2023 have already been renewed, with another 11,000 square meters or 27 percent awaiting finalization of the renewal contracts. The balance is due for renewal throughout the remainder of the year.
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The article was originally published in Manila Bulleting and written by James A. Loyola.
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