THE country’s biggest property firm wants to become the first listing of its Real Estate Investment Trust (REIT) at the Philippine Stock Exchange (PSE).
PSE President and CEO Ramon Monzon said days after the signing of the new implementing guidelines for the REIT Act of 2009, firms started contacting the exchange to discuss their listing plans.
“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 P1-trillion company wants to be the first to have a REIT listing, and a sizable 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,” Monzon said.
He did not mention the company, but the biggest property firm in the country is SM Prime Holdings Inc., with a market capitalization of P1.17 trillion.
The REIT’s implementing rules and regulations of the Securities and Exchange Commission (SEC), the Revenue Regulations of the Bureau of Internal Revenue, and listing rules of the PSE were all signed in a special ceremony at the Department of Finance office last week.
“There is no question that the regulatory hurdles in operationalizing REITs could not have been resolved if not for [Finance] Secretary Carlos Dominguez’s resolute determination to develop the Philippine capital market,” Monzon said.
The REIT law was signed during the Arroyo administration but took more than a decade to be implemented after the Aquino administration placed stricter guidelines, such as slapping value-added tax on the transferred assets on the REIT entity, while the SEC placed higher public ownership on the property company that will be listed.
Meanwhile, the new REIT listing rules removed many restrictions being frowned upon by property firms. But incorporated a policy which mandates reinvestment in real estate and infrastructure projects in the Philippines within 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 15 to 20 years ago. The PSE will be more competitive in the region with this new asset class,” Monzon said.
The PSE said it will conduct forums for stockbrokers to acquaint them with the amendments on the REIT regulations. It will also incorporate REITs in its investment literacy activities to inform the investors of the features of REITs, and the benefits of investing in this asset type, which will be offered as a new product of the PSE.
Image credits: Nonie Reyes