PROPERTY developer Ayala Land Inc. plans to have the country’s first offering of real-estate investment trust (REIT), hoping to raise between P25 billion and P26 billion in proceeds and become the first company to do so using the current rule.
Jose Emmanuel H. Jalandoni, the company’s group head for commercial business, said the company will list the REIT at the Philippine Stock Exchange using the current rule of floating a minimum of 67 percent of the company that it called Ayala Land REIT Inc.
“The intent is to list based on current regulations, which is a minimum ownership of 67 percent. We are working with BPI as underwriter for this, and we hope to list within the year with the appropriate approvals,” Jalandoni said in a briefing held after the company’s stockholders’ meeting.
“We’re testing the framework. We’ll start with the few assets only—primarily Makati CBD [central business district] assets. Basically the offices,” he said. He declined to give details as the company is still to file its registration statement.
Ayala Land will be the first company to list the REIT a decade after the law was passed in 2009, a measure mostly riled by investors and the property company themselves mainly due to taxation issues and public float rule.
Jalandoni said what the company has only accomplished so far was to rename its One Delarosa Development Property Development Inc. into Ayala REIT, the vehicle it will use for the listing.
“We are listing this vehicle, and we want to see how the market reacts. Because of the size of about half a billion dollars, I think the domestic market can absorb it,” he said.
Bernard Vincent O. Dy, the company’s president and CEO, said the company is looking at the new business model to grow the REIT as it is another leg of growth.
“We will also use this vehicle to basically acquire third-party assets. It doesn’t mean the only assets we will put in this vehicle are the Ayala Land assets. We could actually explore third-party assets as well to be used into this REIT vehicle,” he said.
“There seems to be a demand; there’s something to invest in the REIT. We feel that this is an opportune time to actually come in the market,” he said.
Jeffrey Lim, president of SM Prime Holdings Inc., said they are also prepared to do its own REIT, but it still awaits the change in the implementing rules and regulations (IRR) of the REIT law.
“But if we see an IRR that we think is good for us to set up a REIT, then we will [float]. I think the minimum public ownership is settled, and then the tax angle also. So we don’t know what other provisions the regulators want to change,” Lim said.
The REIT law was enacted in 2009, under the Arroyo administration, with the main aim of broadening the participation of the public in the ownership of real estate in the Philippines and use the capital market as an instrument to help finance and develop infrastructure projects.
The IRR of the said law, however, were crafted by the Aquino economic team.
The said law was designed to recycle real-estate assets by placing them in another REIT company in which the public can invest into by purchasing shares. The shares of the company can also be traded at the PSE.
REIT owners are required to sell to the public a majority stake, or at least 67 percent, in three years from the initial 40 percent upon listing.