The Philippine Stock Exchange said several property companies are gearing up their Real Estate Investment Trust plans after the government relaxed the rules.
PSE president Ramon Monzon said in a statement over the weekend a number of listed property companies were enthusiastic on the landmark signing of the regulations that formed part of the framework of the Real Estate Investment Trust Act of 2009.
“The property firms have long been waiting for industry concerns on REITs to be ironed out. Now that the contentious points have been addressed and the provisions are acceptable to all concerned parties, potential listing applicants have been excited to have their own REITs listed,” Monzon said
“In fact, just days after the momentous signing event, the president of the biggest property firm in the country met with us to discuss their REIT listing plans and timetable. When a one-trillion peso company wants to be the first to have a REIT listing and a sizeable first one at that, you know that the confidence in this new asset class and the support it will get from property companies will be remarkable,” he added.
Among the property firms that earlier expressed interest in REIT were Ayala Land Inc., SM Prime Holdings Inc., DoubleDragon Properties, Robinsons Land Corp. and Megaworld Corp.
The implementing rules and regulations of the Securities and Exchange Commission, the revenue regulation of the Bureau of Internal Revenue and listing rules of the PSE were signed last week.
Under the amended revenue regulations of the BIR, companies registering as REITs may be exempted from the value-added tax, which will no longer be placed in escrow.
The SEC lowered the minimum public ownership requirement for REIT companies to 33 percent from the previous requirement of 40 percent in the first year of listing and 67 percent within three years.
In exchange for a lower public ownership requirement, a REIT company should reinvest all the proceeds raised from the offering in real estate or infrastructure projects within the country within a period of one year.
REIT companies will be required to provide regular reports on the status of the implementation of their reinvestment plan.
“Our peers in Asia have had REITs since fifteen to twenty years ago. The PSE will be more competitive in the region with this new asset class,” Monzon said.
The PSE will conduct forums for stockbrokers to acquaint them with the amendments to the REIT regulations. The exchange will also be incorporating REITs in its investment literacy activities to inform the investing public of the features of the new investment instrument and the benefits of the asset type.
