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Property infusion into REITs seen to attract more investors

Filinvest Cyberzone Cebu — FILINVESTREIT.COM/

By Keren Concepcion G. Valmonte, Reporter

NEWLY listed real estate investment trust (REIT) firms have announced plans to expand initial portfolios, which are seen to further generate interest among investors.

In separate statements last week, Megaworld Corp.’s MREIT, Inc. and Filinvest Land, Inc.’s (FLI) Filinvest REIT, Corp. (FILREIT) said they are planning to inject new properties into their REIT portfolios. MREIT is eyeing to infuse four assets, while FILREIT is aiming to add three more properties to its portfolio.

“We expect continued positive reception for the REIT market following these portfolio expansions, especially for industrial assets as the sector has been one of the bright spots under the pandemic,” JLL Philippines Research Head Janlo C. de los Reyes said in an e-mail on Saturday.

Meanwhile, Timson Securities, Inc. Trader Darren Blaine T. Pangan said current investors also stand to benefit from the infusion of new properties into REIT portfolios.

“The asset injections may result in the firms having a more enhanced and attractive asset portfolio,” Mr. Pangan said in a Viber message on Friday.

In a statement on Nov. 16, MREIT said its planned acquisition will increase its portfolio’s gross leasable area (GLA) to 280,131 square meters (sq.m.) from 224,431 sq.m. The acquisition is expected to be finalized by December this year so the properties may contribute to its revenues by January next year.

These properties include three assets in Iloilo Business Park, which are Two Techno Place, Three Techno Place, and One Global Center, and World Finance Plaza in McKinley Hill in Fort Bonifacio in Taguig. MREIT said the properties have an average occupancy rate of 99%, thanks to business process outsourcing (BPO) locators.

Meanwhile, in a statement on Nov. 18, FILREIT said the acquisitions will increase its GLA to 403,000 sq.m. from over 300,000 sq.m. It plans to infuse Filinvest Cebu Cyberzone Tower 2 in Cebu City, Filinvest Axis Tower Two, and PBCom Tower in Makati City within one to 1.5 years.

RL Commercial REIT, Inc. (RCR), the REIT firm sponsored by Robinsons Land Corp. (RLC), is also planning to infuse 40,000 to 100,000 sq.m. within the next 18 months. RLC previously said its potential pipeline for infusion into RCR spans 422,000 sq.m. from its office business portfolio alone.

Pioneering Ayala-led AREIT, Inc. has already recognized income from the properties that were part of its property-for-share swap transaction earlier this year, which also grew its GLA to 549,000 sq.m.

“We saw stable performance of REITs despite headwinds, and we anticipate this to be the case [until] end of the year,” JLL Philippines’ Mr. De los Reyes said.

“The initial REIT portfolios have been generally resilient on the back of diverse locations, solid occupancy levels, and balanced tenant mix, which have helped manage risk brought by the pandemic,” he added.

Timson Securities’ Mr. Pangan said REITs “seem to remain attractive to investors, especially that they continue to provide a good avenue for portfolio diversification.”

“Majority of the REIT issues have appreciated since their listing dates, and the market may be looking forward to upcoming REITs with unique exposures to various industries in the country,” Mr. Pangan said.

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