Filinvest REIT [FREIT] receives SEC approval for an August IPO

With the SEC approval we get a few more details of the Gotaniun Family’s REIT IPO, which we should write down in pencil (maybe not pen just yet).

The offer period will run from July 19 to July 28, and Filinvest REIT [FREIT] will make its full debut on the PSE’s main board on August 6. Nothing else substantial was learned from the SEC’s press release announcing the approval.

The deal is still 36.74% of FREIT for P14.92 billion, with FREIT’s parent company, Filinvest Land [FLI 1.13 0.89%], as the selling shareholder at a maximum price of P8.30/share. Those numbers assume the exercise of an over-allotment option. FREIT will be born with a gross leasable area (GLA) of approximately 300,000 square metres. The prospectus has not yet been released to the general public.

MB BOTTOM-LINE

There are a few open questions about this IPO that will get resolved in relatively short order, considering it’s July 8 today and this thing starts getting sold in just 11 days.

First up is the final price of the IPO, which will be set on the Pricing Date just a few days before the offer period officially starts on July 19. It’s hard to say whether FLI will drop FREIT’s price; AREIT [AREIT 36.50 unch] dropped its SEC-approval price from P30.05 to P27.00/share on the pricing date, but DDMP [DDMPR 1.99 unch] did not make any changes and stuck with its P2.25/share price, while Megaworld’s MREIT is already telegraphing a probable pricing date price change and it hasn’t even been approved by the SEC yet.

In terms of GLA, FREIT will start life in second place, behind AREIT’s 334,000 sqm but ahead of DDMPR’s 172k sqm. As a person that gets excited about every single IPO (but especially those for REITs), I’m very interested to do a deeper dive once I get my sweaty digital hands on the prospectus. Anecdotally, the whispers that I’m hearing from around town are expressions of vague disinterest. Something to keep an eye on; as we found out with DDMPR, even a sponsor oozing with goodwill and flexing a winning record can be humbled in trying to sell a REIT to the market. 

--

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.