The urgency and impact of implementing Philippine REITs
What is a REIT?
A Real Estate Investment Trust (REIT) is a publicly listed corporation that allows investors to buy shares in recurring income-producing real estate assets such as office buildings,hospitals, warehouses, hotels, and shopping malls. In most cases, REITs operate by leasing space and passing on collected rent payments to their investors in the form of dividends. In many jurisdictions in the Asia Pacific region, as mandated by law REITs distribute at least 90 percent of their earnings in the form of dividends or they enjoy tax benefits.
REITs in the Philippines: Democratizing Wealth
The Philippine Congress passed the REIT law or Republic Act (RA) 9856 in December 2009. The measure was intended to “democratize wealth” by allowing Filipinos to invest in the real estate market without owning actual property or the disadvantages of high transaction costs and illiquidity. The Philippine government enacted the measure to develop the country’s capital market, broaden developers’ fundraising options, unlock the value of real estate firms’ properties and expand developers’ leasable portfolio.
(source: colliers international)