The real estate investment trust (REIT) market in the Philippines, if done right and with appropriate rules and regulations in place, has the potential to grow to hundreds of billions of dollars in value over the long-term.
While the real estate market is now in a bearish mode due to the lockdowns, experts said the industry is poised to bounce back towards the second half of 2021 to early 2022.
These are among the projections of officials of the Asia-Pacific Real Estate Association (APREA) in a press conference yesterday.
Stewart Labrooy, chairman for Southeast Asia Market Chapter of APREA, said while nobody can predict how the REIT market is going to grow, the Philippines can take the examples of other countries in Asia-Pacific — Hong Kong, Singapore, Japan, Australia and India — whose grown their REITs over time.
“I think the product (REIT) is a very, very attractive product to the industry and you’re here to stay. So my view is that this will continue to grow,” said Labrooy.
He said the Philippines can benefit from the expected shift to Asia-Pacific of REIT investors.
Sigrid Zialcita, chief executive officer of APREA, said the business process outsourcing (BPO) sector will underpin the growth of the real estate sector in the Philippines.
“From a real estate standpoint, the BPO sector in the Philippines is the most critical one. It is the pillar of the real estate sector and accounts for about seven to 8 percent of the GDP in the Philippines.Having a strong BPO sector will be a catalyst for that industry,” Zialcita said.
The first REIT that was established in the Philippines — Ayala Land’s — had a portfolio in the office sector consisting of BPOs.
“The first REIT is just beginning and we are expecting more to come in the next six to 12 months,” Zialcita said.
John Lim, chairman of APREA, in the same event, said the Philippines has very good quality real estate assets.
“There are very big real estate companies, very big global names as well in the Philippines.
For them now in the new reality, securitization is probably a very, very important option for.
You will see some very good quality assets coming to the market,” Lim said.
He added this is very encouraging for the capital markets in the Philippines. – Irma Isip