FILRT mall asset injection approved by SEC

Filinvest REIT [FILRT 3.18 unch; 66% avgVol] [link] said its P6.3-billion asset injection, featuring the Festival Mall (“Main Mall” building), was approved by the SEC. The transaction was performed between FILRT and its parent company, Filinvest Land [FLI 0.73 ?1.4%; 33% avgVol], using a property-for-share swap. The transaction increases FLI’s ownership stake in FILRT from 51% to 63.27%.

MB BOTTOM-LINE:  This move was approved by FILRT’s board back in late January, approved by FILRT’s shareholders in early March, and then SEC approved three months later. Just over five months, door-to-door, is not bad, but unless there’s a ton of activity going on between FILRT/FLI and the SEC behind the scenes that we don’t get to see, it feels like this SEC approval process is ripe for reform. I’ve been covering REITs from the beginning, and I don’t remember a single property-for-share swap that has been rejected by the SEC. While I recognize the “Chesterton’s Fence” (link) of tinkering with administrative processes, that kind of success rate makes me think that there has to be a way to dramatically reduce the lag time between submission to the SEC and final approval. Pivoting to talk about FILRT specifically for a second, this is a move designed to insulate FILRT shareholders from the underperformance of the commercial office sector. It’s a tangible move by management to diversify its income and improve some of its metrics, like occupancy, in the footsteps of the bigger players like AREIT.