Ramon Monzon, Philippine Stock Exchange Inc. (PSE) president, is optimistic the approval of the amended rules on real estate investment trust (REIT) will perk up the market.
The Securities and Exchange Commission’s (SEC) Implementing Rules and Regulations, Bureau of Internal Revenue’s Revenue Regulation and the PSE’s Listing Rules were all signed during a special ceremony at the Department of Finance office last January 20.
This is particularly important for a market that has been on a downtrend since posting a record high of 9,058.62 in January 29, 2018, 15.84 percent lower compared to its Friday close of 7,623.41.
On a year to date basis, the market is down 2.45 percent since closing 2019 at 7,815.25.
Monzon said a number of listed property companies were “very enthusiastic” with the development and that one firm, which he did not identify, has already discussed with the PSE its plans of listing.
Currently, of all the listed realtors in the PSE, Ayala Land Inc. has formally made its REIT plans public.
“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,” said Monzon.
“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 one-trillion-peso company wants to be the first to have a REIT listing and a sizeable 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,” he added.
According to Monzon, 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.”
“We have to thank and credit Secretary Dominguez for his push to have the REIT regulations available,” he said.
Monzon said the PSE REIT Listing Rules, which were approved by the SEC, incorporated a policy which mandates reinvestment in real estate and/or 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,” he said.
Market observers said the passage of REIT will be a big catalyst for the market moving up this year.
