Filinvest REIT Corporation, the real estate investment trust of the Gotianun Group, registered a seven percent improvement in net income to P601 million in the first six months of 2024 from the P561 million earned in the same period last year.
In a disclosure to the Philippine Stock Exchange (PSE), the firm said revenues contracted 11 percent to P1.4 billion in the first half of the year from P1.58 billion in the comparative period of 2023.
FILRT said this is due to the overhang of the temporary drop in occupancy in the first quarter due to rightsizing of some tenants brought about by hybrid work.
This was partially offset by the 3.1 percent dip in cost and expenses to P643 million as the company continued to be prudent in managing its resources.
The company’s portfolio of 17 office buildings and one resort lot totaling 330,448 square meters had an average occupancy of 79 percent in the first half of 2024, lower than the average occupancy of 84 percent in the same period last year.
However, FILRT said it has been proactively rebuilding its portfolio’s occupancy. By the end of June 2024, occupancy has increased to 81 percent.
FILRT is likewise transitioning into having a more balanced tenant base by signing new traditional companies to replace the BPO tenants that have downsized due to the shift to work-from-home or hybrid set-ups of its employees.
“We are pleased with the steady improvement in occupancy of FILRT. Our deliberate efforts in rebuilding the tenancy of our office buildings are starting to pay off,” said FILRT President and CEO Maricel Brion-Lirio.
She added that “we have been signing fresh names, particularly multinational BPO new entrants in the Philippines from Singapore and New Zealand, to name a few, as well as traditional companies.”
“We are looking to expand our portfolio and further diversify our tenant base as we continue to gain momentum,” Brion-Lirio noted.
FILRT said it remained ahead of competition in Alabang where 16 of the 17 buildings are located. FILRT registered higher occupancy than the Alabang market occupancy of 73 percent as reported by Colliers International in its second quarter 2024 Office market report.
FILRT was also able to close new leases at the upper end of the P500 to P750 lease rate per square meter in the Alabang area.
As of end-June 2024, a total of 13,126 square meters of new leases have been signed by FILRT while another 20,742 square meters have Letters of Intent.
On tenant retention, over 26,204 square meters or 46 percent of expiring leases for 2024 have already renewed, with another 16,270 square meters or 29 percent awaiting finalization of the renewal contract.
FILRT has been deliberately diversifying its tenant mix, with the addition of traditional tenants and co-working locators.
The current overall tenant mix is comprised of 76 percent multinational BPO companies, 12 percent traditional and co-working spaces, 11 percent hospitality, and the balance for retail.
FILRT stressed that it has no POGO exposure and has been free of POGOs since the second quarter of 2022.
Meanwhile, the Board of Directors of FILRT has approved the dividend declaration to all stockholders amounting to P0.062 per outstanding common share.
This declaration brings year-to-date dividends to P0.191 per outstanding common share, equivalent to an annualized yield of 8.5 percent based on the closing share price on Aug. 7, 2024.
The quarterly cash dividends will be payable on Sept. 6, 2024 to all stockholders on record as of Aug. 23, 2024.
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The article was originally published in Manila Bulletin and written by James A. Loyola.
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