REIT listing brings business optimism, says Dominguez

Published August 13, 2020, 8:03 PM

by Chino S. Leyco

The listing of the Philippines’ first Real Estate Investment Trust (REIT) is a bright spot amid the economic wreckage of coronavirus, the Department of Finance (DOF) said yesterday.

In a statement, Finance Secretary Carlos G. Dominguez III said the listing done by the Ayala Land-backed AREIT Inc. signalled the domestic market’s readiness to resume business amid challenges.

“This public offering is a strong vote of confidence in our good economic prospects and in the resiliency of many of our industry sectors, some of which will be occupants of Ayala Land Inc.’s REIT properties,” Dominguez said.

“It shares in the optimism that, notwithstanding the global economic downturn today, the Philippine economy has strong fundamentals to rise quickly from the devastation brought about by the global health emergency,” he added.

Dominguez said he is optimistic that AREIT’s public offering and listing will encourage more companies to form REITs that would “provide attractive and dependable investment opportunities for the average Filipino.”

On top of being a secure investment vehicle for small investors, REITs also provide multiplier effects on the economy, considering that the capital and profits to be raised by REIT sponsors will be reinvested exclusively in the domestic real estate and infrastructure sectors, he noted. 

 “A REIT public offering not only signals that there is strong confidence in existing real properties, but that the company sees new opportunities for expansion with the proceeds of the offering,” the DOF chief said.

Dominguez had strongly pushed the implementation of the 11-year old Republic Act (RA) No. 9856, commonly known as REIT Law ever since he assumed the finance portfolio in 2016. 

In bringing the long-dormant REIT law back to life, Dominguez made sure that the review and redrafting of its implementing rules and regulations (IRR) would guarantee that any profit earned or capital raised by REIT promoters or sponsors would be reinvested in the domestic economy, rather than squirreled away overseas. 

 “This ensures that the funds invested by Filipinos will stay in our domestic economy and will contribute to the modernization of our infrastructure,” Dominguez said. 

The REIT law, with its amended IRR, now allows both small and large investors to own real estate assets, presenting an alternative and secure investment instrument for middle-income families and overseas Filipino workers (OFWs).

 “Today is a momentous event. More than a decade since the enactment of the REIT Law or the Real Estate Investment Trust Act, we will witness the Philippines’ first REIT listing through Ayala Land’s public offering,” Dominguez said.