First Philippine Reits likely to be listed by year-end as government relaxes rules in decade-old law

The Philippines could see real estate investment trusts take off this year after the government amends a Reit law passed more than a decade ago, addressing investor concerns, say industry observers.
"Reits are likely to be implemented this year as the government has agreed to relax the law's restrictive rules," said Joey Bondoc, senior research manager for Philippines at Colliers. "Colliers believes that more firms are likely to tap Reits once the law's implementing rules and regulations are relaxed."
Reuters reported in April that Ayala Land, one of the Philippines' largest developers, could raise US$500 million in what would be the country's first Reit offering.
Bondoc said that taking into account Ayala Land's proposal, existing cap rates in the market and the amount of assets that developers could divest through Reit using the minimum public ownership of 33 per cent, the market could be worth around US$8 billion to US$9 billion.
Although the Reit law was passed in 2009, the launch of Reits was held up because of the reluctance of the previous administration to grant tax perks under the scheme to developers that could have potentially resulted in an estimated loss of 3.7 billion pesos (US$71.6 million) in revenue a year.
Marco Antonio, chief executive at listed Century Properties Group, said the expected launch of Reits this year could not have come at a better time, citing the bullish property sector, growing economy and the government's aggressive infrastructure projects.
"Reits will provide developers like us new capital to expand and deliver high value real estate projects," he said. Century Properties has a commercial portfolio of 300,000 square metres of gross floor area.
Century Properties Group's Century Diamond Tower will add 58,000 square metres of leasable area to its portfolio when the project is completed by the end of the year. Photo: Handout
Last year it completed the Asian Century Center, a 21-storey green office building in Bonifacio Global City, near Makati, Manila's main business district, which was 75 per cent leased out even before opening.
Antonio said that the completion of the Century Diamond Tower in Makati later this year will add 58,000 square metres to its portfolio and lift its leasing revenues to 2 billion pesos by 2020.
Analysts said that while many Philippine developers were well-positioned to...