Filinvest REIT Corp. (FILRT), the real estate investment trust of the Filinvest group, is acquiring a resort in Boracay even as earnings from its office leasing business declined.

In a disclosure to the Philippine Stock Exchange, the firm said it is buying 2.9 hectares of land owned by Filinvest Development Corporation (FDC) in Boracay island for P1.05 billion in cash, VAT-exclusive.

The land is being leased by Boracay Seascapes, Inc. (BSI), the building owner of Crimson Resort & Spa Boracay and a subsidiary of FDC.

“We are pleased to announce FILRT’s first asset infusion after our IPO in August last year,” said FILRT President and CEO Maricel Brion-Lirio.

She noted that, “This not only increases the distributable income to our shareholders in the immediate term but also supports our goal of delivering stable dividends and increasing the potential for capital appreciation in the longer term. We remain focused on providing attractive returns to our investors.”

The acquisition of this land will directly contribute to FILRT’s income starting January 2023, adding to the earnings generated by the company’s existing 17 buildings.

This will expand FILRT’s portfolio in terms of size by 29,086 square meters or by 10 percent to reach 330,448.3 square meters of gross leasable area.

This likewise will improve occupancy by 1 percentage point to 89 percent and extend WALE to 6.83 years. FILRT’s total property value upon infusion will rise to P49.5 billion.

FILRT reported a 38 percent drop in net income to P1.05 billion in the first nine months of 2022 from P1.7 billion in the same period last year as third quarter earnings fell 47 percent to P344.92 million from P648.17 million.

Revenues in the first nine months declined to P2.46 billion from P2.74 billion last year with third quarter revenues dipping to P822.19 million in 2022 from P836 million in 2021.

“While the office leasing segment has its challenges due to emerging trends surrounding remote work, we remain focused on delivering growth for our shareholders,” said Brion-Lirio.

FILRT continued to lock in the expiring leases in 2022, renewing and signing about 20,585 square meters or 86 percent as of the end of the first nine months of 2022.

Only a small 4 percent did not renew and the balance of 10 percent is under negotiation with a high probability of renewal.

FILRT also signed new leases in the third quarter of 2022 totaling 2,840 square meters coming from the traditional sector.

FILRT’s tenant mix is comprised of 90 percent BPOs with the balance largely traditional ROHQ with a small percentage of retail.