REITs in PH raise P76 billion in 2 years

Real estate investment trusts (REITs) in the Philippines have raised over P76 billion in 2 years, according to the Department of Finance (DOF) in an article published by ABS-CBN News.

The DOF also noted that the Securities and Exchange Commission (SEC) announced the total market capitalization of REITs hit $3.46 billion or 0.96 percent of the country’s gross domestic product (GDP) in 3Q 2021.

Data from SEC reveals that as of November last year, Robinsons Land Corporation’s Commercial REIT (RCR) netted the highest amount at P21.56 billion from its initial public offering (IPO). 

Megaworld’s MREIT comes in after at P15.29 billion with DoubleDragon’s DDMP following shortly at P14.71 billion. Filinvest REIT Corporation (FILREIT) acquired P12.58 billion and Ayala Land’s AREIT earned P12.28 billion. 

REITs are required by law to pay 90 percent of their annual net income to shareholders and to reinvest in the country to assist in the development of the capital market, help finance infrastructure projects, and democratize wealth. 

The 5 REITs are required to reinvest a total of P79.87 billion based on their accumulated earnings last year. At the moment, P22 billion has already been reinvested as of November 2021.

REITs to remain a bright spot of the new year

David T. Leechiu, President of Leechiu Property Consultants, told BusinessWorld in a video call that he expects a healthy pipeline of REITs coming in the following months. He estimates that there may be at least two new REITs per month this year, based on the companies that have asked the firm to evaluate their portfolio. 

REITs of commercial properties may see a rise in numbers, according to Raul P. Ruiz, President of RCBC Securities. He says that more retail spaces, in particular, will enter the market thanks to the economy’s reopening.

Joey Roi H. Bondoc, Associate Director of Colliers Philippines, also noted that industrial assets will see a surge in popularity because of the need for warehousing opportunities and industrial facilities, as well as the improvement of manufacturing output. 

Other major players are considering acquiring more assets, such as Robinson’s Land Corporation’s RLC, according to an article by PhilStar. As recently as December, MREIT also acquired four more assets to boost their portfolio. 

More REITs with portfolios comprising hospitality and energy assets are also expected to emerge this year which will broaden investment opportunities, as reported by Manila Bulletin

Citicore Energy REIT Corp. has expressed interest in engaging the capital markets this year to build new solar plants. Citicore will be the first energy-focused company with solar assets.

Besides the current five REITs in the market at the moment, other key stakeholders are planning to launch a REIT IPO this year. These companies include SM Development Corporation (SMDC) and Vistaland Land & Lifescapes, Inc.

A sign of positive things to come

The impressive P76 billion market capitalization of REIT since its debut two years ago is a sign of how valuable the public perceives these assets to be. As such, it’s a sign of positive things to come for these properties. 

Thanks to its relative stability, impressive range of assets, and favorable financial returns, REITs offer investors a rewarding way to diversify their portfolio. It’s also a way to reinvest in the country’s bright future. For this reason, industry experts and seasoned investors alike are recommending REITs as a solid investment vehicle.

Buyers are also responding to this shift in priorities in the market. Based on data presented during Lamudi Academy’s year-end round-up, buyer behaviors are also signaling an interest in more functional investments, particularly in areas with CBDs, which are cities that boast plenty of currently listed REIT assets. 

The economy’s gradual reopening also points to a property market recovery within the year and a bullish real estate industry in the coming years. With even more companies engaging with capital markets and adding assets to their portfolio, these conditions could inspire confidence in people looking to invest in these properties.

Stay tuned for the latest real estate news by following Lamudi on Facebook, Twitter, Instagram, Youtube, and LinkedIn.

Source: ABS-CBN News, PhilStar, BusinessWorld, Manila Bulletin


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