Diversify with REIT – Real Estate Investors Told

Real Estate Investment Trusts (REIT) is slowly gaining momentum in the Philippines that investors should consider. Taking time to understand its full benefits can help investors diversify its portfolio.

Lamudi concluded the third installment of The Outlook Media Roundtable Series 2019: “A Collaboration Towards Economic Prosperity: Understanding Real Estate Investment Trusts for Investors”, in partnership with Colliers International Philippines, Subdivision and Housing Developers’ Association, and Holcim Philippines.

Its very own Lamudi CEO Bhavna Suresh moderated the discussion on how REITs benefit not just the real-estate sector but the economy at large.  The discussion also evolved on how REIT enables every Filipino investor to invest in high-value real estate assets.

Here are some notable quotes from this roundtable series:

• “They just have to buy into a REIT company because the REIT company is obliged by law to pay 90% of net income as dividends — and that goes to the investor.”

Joey Bondoc /Senior Research Manager /Colliers International Philippines

• “REITs answer investors’ demand for a tax-efficient and yield-driven vehicle as they provide greater liquidity and more stable return.”

Hannah Yulo / Chief Investment Officer / DoubleDragon Properties Corporation

• “If you are going to retire, and you want liquidity, REIT would be the best option for you because you get cash flow regularly. It may be annually, semi-annually, or quarterly.”

Gary Hablero / Director for Commercial Investments /RE/MAX Capital

• “On average, the minimum investment is from Php5,000 to Php10,000. It’s very affordable from a quantitative standpoint.”

Reggie Cariaso / Head of Strategy Products, and Support / Corporate Banking Group – Bank of the Philippine Islands (BPI)

Boosting the Philippines’ Capital Market

Colliers noted the following information about REIT:

• The growth of office rents over the years makes office buildings an attractive asset class to list under REIT.
• More offshore gaming, multinational, outsourcing companies, and flexible working space operators are expected to sustain the huge demand for office space. The government’s infrastructure push also presents a big opportunity for developers to transfer their assets into REIT.
• REITs benefit developers through generating funding that can be used to expand the real estate sector in key cities outside Metro Manila such as Cebu, Bacolod, Iloilo, Davao, Cavite, and Clark in Pampanga.
• Harnessing the full potential of the REITs will make the Philippines at par with other Southeast Asian markets like Indonesia, Malaysia, and Singapore, which already have listed REITs.

The roundtable series concluded with a deeper appreciation and understand of REIT which is becoming an integral part of the real estate industry.

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