FLI targets to triple office portfolio in next 5 years

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Listed property firm Filinvest Land Inc. (FLI) is targeting to triple its office portfolio over the next five years, with the initial capital spending for 2015 to come from its newly listed fixed-rate bonds worth P7 billion.

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The Gotianun-led FLI listed its long-term peso bonds at the Philippine Dealing and Exchange Corp. on Thursday.

FLI president and chief executive officer Josephine Gotianun Yap said the funds raised from the bond sale will provide for the firm’s spending in the next 15 months.

“For 2015, FLI is investing heavily in recurring income projects. Just from the existing projects already in the construction and planning stage, we can expect to triple our office portfolio and attain a 250 percent increase in our retail portfolio to hit close to 1.5 million square meters of gross leasable area in the next five years. We tapped the long-term bond market to ensure our funding sources match our project horizon,” Yap said.

The balance of the funds from the bond sale will be allotted for land banking and development of affordable and middle-income housing.

“By focusing on Oasis and Spatial medium rise building (MRBs) brands and the Futura affordable housing projects, majority of our projects  serve our traditional markets and have construction cycles of  less than a year for faster revenue recognition and less exposure to construction cost risk,” Yap said.

FLI has launched more projects outside Metro Manila in 2014, which include developments in Iloilo, Cagayan de Oro and Palawan.

In 2015, majority of the new launches are seen rising in Northern Luzon and Central Visayas such as Dumaguete, further expanding its presence nationwide.

FLI’s bond issue consisted of a P5 billion base offering of bonds and an oversubscription option of P2 billion. The base offer was two times oversubscribed, allowing FLI to exercise its oversubscription option.

The issuance consisted of seven-year bonds with an interest rate of 5.5597 percent per annum, and 10-year bonds with a rate of 5.6303 percent to 5.9803 percent, payable in quarterly arrears.

The company has said that out of the proceeds, P4.95 billion will be used for debt repayment while P2.19 billion will fund capital expenditure through 2015, mostly for office portfolio expansion.

BDO Capital & Investment Corp., BPI Capital Corp. and First Metro Investment Corp. served as the joint issue managers, lead underwriters and bookrunners, while EastWest Banking Corp. was the co-lead underwriter.

Incorporated in 1989, FLI is the property unit of Filinvest Development Corp., mostly engaging in township projects that consist of retail, residential and office spaces.

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