‘Successful REIT listings show investor confidence in Philippines’

MANILA, Philippines — Successful listings of real estate investment trusts (REIT)  since last year indicate strong investor confidence in the country’s prospects of recovery from the pandemic-induced economic slump, according to  Finance Secretary Carlos Dominguez III.

In his address during the listing of DDMP  REIT shares at the stock exchange,  Dominguez said the amendments to the implementing rules and regulations (IRR) of the Real Estate Investment Act of 2009 would allow the REIT sector to finally take off.

“As with the previous initial public offerings made during the pandemic, Double Dragon’s REIT listing reflects the strong confidence of our investors in our economic recovery,” said the finance chief.

He noted that when the REIT Act was passed into law in 2009, companies did not find the terms attractive because of friction costs, minimum public ownership requirements and the  taxes imposed.

“Last year, the Duterte administration successfully resolved the issues that prevented Philippine REITs from finally taking off. We took on the challenge of crafting a regulatory framework for this financial instruments that is right for the country,” said Dominguez.

Under the law, companies that own and operate income-generating real estate assets are considered REIT companies. Their property portfolios may include offices, apartment buildings, hotels, warehouses, and shopping centers among others.

Under the amendments made to the IRR, funds raised from REITs must be reinvested exclusively within the country’s real estate and infrastructure sector.

Minimum public ownership in firms was also relaxed to at least 33 percent of the outstanding capital stock from the previous 40 percent minimum in the first year of listing.

DoubleDragon’s offer, worth as much as P14.7 billion, is the second REIT to be listed at the stock market following AREIT Inc.’s P13.6-billion IPO last year.

The firm’s investment portfolio, which Dominguez described as “very compelling,” consists of six completed office towers with retail components in the DoubleDragon Meridian Park.

“DoubleDragon’s ambitious plan of building a chain of modern industrial warehouse complexes in strategic locations across the country will help bridge the gap in our logistics distribution network.

“This will effectively encourage the expansion of manufacturing activities and create more jobs for our people. Infrastructure investments will primarily fuel our economic recovery,” Dominguez said.

He said REITs would become an important tool to economic recovery as all proceeds from REIT offers would be retained within the domestic economy.

“At this particular time in our history, REITs are indispensable to rebuilding a strong and truly inclusive economy for our people. These will make available huge volumes of capital to our financial system that will help fund our long term growth,” Dominguez said.