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Manila Bulletin devider Business devider The Stock Market devider SEC greenlights Filinvest REIT's asset-for-share swap for Festival Mall

SEC greenlights Filinvest REIT's asset-for-share swap for Festival Mall

Published May 30, 2025 10:24 am

The Securities and Exchange Commission has approved the valuation of Filinvest Land Inc.'s ₱6.26 billion property to be acquired by Filinvest REIT Corporation (FILRT) via an asset-for-share swap, bringing it a step closer to completion.

In a disclosure to the Philippine Stock Exchange, FILRT said it has received from the SEC the Certificate of Approval of Valuation for its property-for-share swap with FLI under which LI will transfer its ownership over the Festival Mall - Main Mall, consisting of a building and certain machinery and equipment, in favor of FILRT.

Festival Mall-Main Mall, which is located in Filinvest City, Alabang, Muntinlupa City, consists of a building with a gross leasable area of 121,862 square meters.

In return, FILRT will issue to FLI 1.63 billion primary common FILRT shares at an issue price of ₱3.85 per share under the Memorandum of Agreement and the Deed of Exchange both dated March 5, 2025.

The Transaction Price was set at a 30 percent premium over FILRT’s 30-day volume-weighted average price of ₱2.94 per share, which is within the range of fair values provided for in FTI Consulting Philippines, Inc.’s Fairness Opinion.

FILRT’s Related-Party Transaction Committee and Board of Directors unanimously approved the Transaction at their special meeting on Jan. 24, 2025, and FILRT’s stockholders subsequently approved it during their special meeting on March 4, 2025.

The acquisition of the Property will increase FILRT’s total gross leasable area by 37 percent to 452,310 sq.m. This likewise will improve occupancy from 83 percent to 88 percent and extend the weighted average lease expiry (WALE) from 7.3 to 14.6 years.

This will also increase FLI’s equity in FILRT from 51.06 percent to 63.27 percent.

The Transaction allows FILRT to diversify its income sources by integrating retail mall properties into its portfolio. Prior to the infusion, 91 percent of the GLA of FILRT is office buildings.

Post infusion, the portfolio mix of FILRT will be 67 percent offices, six percent hospitality (Crimson Boracay lot) and 27 percent retail (Festival Main Mall).

The infusion of income-generating retail mall assets is expected to result in an increase in FILRT's distributable income.

This, in turn, translates to higher dividends per share for FILRT shareholders, enhancing the overall attractiveness of the Real Estate Investment Trust to investors. Dividend per share growth resulting from the infusion will be 5.65 percent.

With the anticipated growth in income and dividends, the transaction creates opportunities for improving the share price.

Related Tags

Filinvest Land Inc. Filinvest REIT Corporation Festival Mall
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