The Festival Mall in Filinvest City, a suburban business district in southern Metro Manila
Filinvest Land, the real estate arm of the Gotianun family’s Filinvest Development, will divest its flagship shopping mall to its publicly listed real estate investment trust in a deal valued at 6.3 billion pesos ($109 million).
Under the deal, Filinvest Land will transfer ownership of Festival Mall to Filinvest REIT (FILRT) in exchange for 1.63 billion FILRT shares at 3.85 pesos each, a 25% premium to Friday’s closing price before the transaction was announced yesterday.
“The transaction is expected to be dividend accretive to both Filinvest Land and FILRT,” the Filinvest Land said in a statement on Monday. Following the deal, Filinvest Land’s stake in the REIT will increase to 63.3% from 51%.
The move follows that of other major Philippine property developers from Ayala Land Inc. to the Gokongwei family’s Robinsons Land which have injected retail assets in the past two years to diversify the revenue streams of their REITs.
The infusion of Festival Mall will boost FILRT’s real estate portfolio by 37% to 452,3109 square meters, including 17 Grade A office buildings. The mall is located in the 244-hectare Filinvest City, a suburban central business district developed by the group in the late 1980s in the southern Metro Manila enclave of Alabang.
The Gotianun family had a net worth of $805 million in August when Forbes Asia published the list of the Philippines’ 50 richest. Filinvest Development was founded by the late couple Mercedes and Andrew Gotianun Sr, who ran a small financing company in 1955 before venturing into their first housing project in the central Philippine island of Cebu in the late 1960s. The conglomerate, currently helmed by siblings Jonathan and Josephine, has since diversified into banking, sugar and power.