GOTIANUN-LED Filinvest Land, Inc. (FLI) is looking to expand its rental business with a target of reaching 2.146 million square meters (sq. m.) of gross leasable area (GLA) by 2024.
In the company’s annual stockholders’ meeting held virtually on Thursday, FLI President and CEO L. Josephine Gotianun-Yap said the company’s rental business already accounted for 48% of its net income in 2019, larger than the 46% that came from its residential business.
FLI’s plan is to expand its GLA further until 2024, which would translate to a five-year compound annual growth rate (CAGR) of 23%.
“Close to half of our revenues come from our rental or investment properties. We will continue to grow this segment,” Ms. Yap said in a statement. “Based on an international appraisal company, our existing investment portfolio and those under construction are valued at P190 billion.”
The company earlier announced a capital expenditure (capex) allocation of P16 billion for 2020. Of this budget, P7.3 billion will be spent on its rental business, while the balance will go to its residential trading business.
FLI said it is approaching the post-lockdown future with a two-pronged strategy: expanding its rental business or investment property portfolio with a more diversified mix, and prudently expanding its residential portfolio in new territories.
On the rental business, Ms. Yap said FLI has 94,379 sq. m. of office GLA currently under construction. The plan is for the office segment to have 1.235 million sq. m. of GLA by 2024. “Our investment strategy will focus primarily on office and logistic products,” Ms. Yap said. These will be distributed in Metro Manila, Cebu and Clark.
Aside from the office segment, the target GLA for retail will reach 471,000 sq. m., for warehouse 400,000 sq. m. and for dormitel 40,000 sq. m. by 2024.
For the residential business, Ms. Yap said the plan is to focus on the end user, affordable and middle income markets. The company is also geared towards low- and mid-rise buildings to manage construction risk.
“In 2020, (FLI) will be offering more (mid-rise building) developments as we believe it is a preferred product of families for convenience and accessibility, as well as because of the presence of bigger and inspiring open spaces in the development,” Ms. Yap said.
“(FLI) will continue to focus on landed housing and provide value-for-money homes in safe and accessible locations,” she added.
These new projects will be in secondary cities in Greater Metro Manila and provinces such as Zamboanga.
Ms. Yap said the company decided to reduce by half its residential launches this year from the original P30-billion target due to dampened demand. But should recovery be quick, she noted FLI is ready to proceed with the projects as needed. “In the second half, our construction focus will be to catch up on project completion,” she said.
Earnings of FLI fell 25% to P1.35 billion in the first quarter due to disruptions amid the coronavirus disease 2019 (COVID-19) pandemic. Ms. Yap said the company will be treading more cautiously and will keep reassessing its lineup of projects as the situation develops.
Shares in FLI at the stock exchange dipped one centavo or 0.96% to close at P1.03 each on Thursday. — Denise A. Valdez
