REITs raise P76 billion in fresh capital since 2020 – BusinessWorld Online

By Jenina P. Ibañez, Senior Reporter

REAL ESTATE investment trusts (REITs) in the Philippines have raised P76.42 billion in new capital in almost two years since new rules took effect, the Department of Finance (DoF) said.

The total market capitalization of REITs in the Philippines reached $3.46 billion as of the third quarter, the European Public Real Estate Association (EPRA) said in a report.

This accounts for 0.96% of the country’s end-2020 gross domestic product, the DoF said in a press release on Tuesday.

“This places the country’s less than two-year-old REIT sector in the middle of the pack among 12 selected economies in the South and East Asian regions in the EPRA Index, ahead of Taiwan, South Korea, India, Indonesia, and China,” the DoF said, citing the Securities and Exchange Commission (SEC).

The implementing rules of the REIT Act of 2009, which took effect in February 2020, lowered the minimum public ownership requirement for REITs.

It also required all income generated from REITs to be invested back into real estate and infrastructure projects in the country within a year.

Since then, the five REITs were listed on the local stock exchange.

Data from the SEC as of Nov. 15 said Robinsons Land Commercial REIT (RCR) raised the biggest amount with P21.56 billion in fresh capital from its initial public offering (IPO).

Megaworld REIT (MREIT) followed with P15.29 billion, while DD Meridian Park REIT (DDMP REIT) posted P14.71 billion in new capital.

Filinvest REIT Corp. (FilREIT) has raised P12.58 billion, followed by Ayala Land, Inc.’s AREIT, Inc. with P12.28 billion.

Citicor Energy REIT Corp., which plans an IPO in the first quarter, expects to raise P10.1 billion.

“The capital raised by REIT sponsors/promoters should be reinvested in the country to develop and deepen the domestic capital markets, broaden the participation of small investors in real estate investments, and help finance infrastructure projects in the country,” DoF said.

The five REITs plan to reinvest funds into malls, office towers, hotels, warehouses, residential buildings, mixed-used developments, industrial lots and land acquisitions, retail centers, and industrial developments.

As of Nov. 15, a total of P22 billion has been reinvested by AREIT, DDMP, FilREIT, and RCR out of the total P79.87 billion required.

Broken down, AREIT has made the largest reinvestment so far of P13.76 billion out of its P19.31-billion requirement.

AREIT made its debut in the local stock exchange in August 2020, while the other four were listed last year.

DDMP has reinvested P6.1 billion out of P12.87 billion needed, while FilREIT reinvested P1.57 billion out of P12.13 billion.

RCR, which was listed in September last year, has reinvested P583.15 million out of the P20.86 billion required.

Data is not yet available for MREIT reinvestments, which was listed in October 2021.

Finance Secretary Carlos G. Dominguez III has said REITs would help support property development in the country and attract investment opportunities for Filipinos.