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Executives bullish on Philippine REIT market

RICHMONDE Tower in Iloilo Business Park

By Keren Concepcion G. Valmonte, Reporter

It is an “exciting time” for the Philippine real estate investment trust (REIT) market, with the pipeline of initial public offerings (IPO) expected to heat up in the near future, according to top company executives.

At a forum hosted by the Securities and Exchange Commission (SEC) on Friday, REIT executives said the Philippines has the potential to have one of the largest REIT markets in the region after seeing five successful IPOs amid the pandemic.

“We were counting… there’s probably going to be a total of maybe five or six more REITs that will probably be launched in the next couple of months or years and that’s just the large-sized REITs,” MREIT, Inc. President and Chief Executive Officer Kevin Andrew L. Tan said.

There are currently five listed REITs, namely: AREIT, Inc., DDMP REIT, Inc., Filinvest REIT Corp. (FILREIT), RL Commercial REIT, Inc. (RCR), and MREIT. All launched their IPOs during the coronavirus pandemic, led by AREIT who debuted on the stock market in August 2020.

“This happened [at] the height of the pandemic. You can just imagine what potential it has beyond the pandemic,” AREIT President and CEO Carol T. Mills said.

The portfolios of the listed REITs are focused mainly on the office sector.

“I think with the five IPOs, we have accumulated a floor area of about a million square meters (sq.m.), but there’s over about nine million sq.m. of office spaces right now in this industry so you can imagine the growth potential of the office segment alone,” Mr. Tan said.

AREIT has since injected new properties into its portfolio, while Filinvest, MREIT, and RCR have bared plans to infuse new assets in the next few months or years.

FILREIT Treasurer and Chief Finance Officer Ana Venus A. Mejia said “future asset [infusions] will actually add to the liquidity and size of the REIT.”

“This also aligns with our other goal of allowing the wider market base, ordinary people can now invest and participate in the new and the growing Philippine commercial REIT sector,” she said.

Meanwhile, issuances from other sectors may boost the country’s REIT market. This includes hospitality (hotels, resorts), retail (malls), logistics hubs, infrastructure, and the renewable energy sector through solar farms, among others.

The SEC recently approved the first energy-related REIT, Citicore Energy REIT Corp.

Meanwhile, DoubleDragon Properties Corp. and Jollibee Foods Corp. are eyeing to issue “the country’s first industrial REIT” next year through DoubleDragon’s industrial leasing unit, CentralHub Industrial Centers, Inc.

Firms said they want a more “established” Philippine REIT market to attract more foreign investors.

“I think foreign inflows have been a bit hesitant at the beginning because it’s such a new market, but I think the more stable it is and the better performing the Philippine REITs will be, the more likely [they’ll invest] in the Philippines and hopefully more foreign investments would come into the country,” DDMP REIT Fund Managers, Inc. President and CEO Hannah H. Yulo-Luccini said.

They also noted that the rise of the Philippine REITs gave more Filipinos a chance to learn about investing, especially amid the pandemic.

“All this talk about REIT has created this wave of allowing more Filipinos to improve on financial literacy, so the art of investing, and being able to understand what they’re getting themselves into,” RCR President and Chief Executive Officer Jericho P. Go said.

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