Filinvest REIT signs global BPO client to 1,993 sqm lease
Filinvest REIT [FILRT 2.94, up 1.0%; 91% avgVol] [link] disclosed that it signed Singapore-based Gear Inc. (GEAR) to a 1993 sqm lease of “premium office space” in FILRT’s Filinvest One Building in Alabang. GEAR has 6,000 employees worldwide, and has been in the business process outsourcing game since 2007. There was no information provided on the lease rate or term.
MB bottom-line: FILRT has one of the worst occupancy rates (~82%) among its cohort of commercial REIT counterparts. It has over 300,000 sqm of gross leasable area (GLA) across its portfolio, but approximately 54,000 sqm of that is just sitting there, waiting to be filled. So while this signing fills nearly 2,000 sqm of that empty space with something that will generate income for FILRT shareholders, it only reduces FILRT’s unfilled GLA by about 3.7%. Don’t get me wrong: any tenant is a good tenant with that much inventory just rotting on the vine. I’m just trying to put this signing into context. BPO isn’t dying, but it’s not the same economic growth engine that drove the commercial real estate sector in previous decades, and it’s an industry that is going through massive changes that could have a direct impact on manpower and space requirements. The FILRT press release refers to this as GEAR’s “first office” in the Philippines, heavily implying that there will be more. If that’s true, then this might blossom into something that will help slow the bleeding.
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