Colliers expects REIT market’s expansion and diversification

Colliers expects REIT market’s expansion and diversification

INVESTMENT MANAGEMENT firm Colliers is expecting the diversification and expansion of the Philippine real estate investment trust (REIT) market, which would be beneficial to the country’s property market.

“Moving forward, Colliers sees an aggressive expansion of REIT companies in the Philippines. We even see some firms exploring the feasibility of divesting other asset classes, including business parks and data centers, as well as co-working and co-living facilities,” Colliers Director and Research Head Joey Roi Bondoc said in a statement on Tuesday.

“We even recommend that firms explore the viability of infrastructure and renewable energy projects,” he added.

With this, Colliers is urging property firms to further test the market as it would bring opportunities from the developing local REIT sector.

“The Philippine REIT market is primed for further diversification and developers should be on the lookout for other assets that can be divested into their REIT companies,” Colliers said.

The firm added that REITs and stakeholders should be mindful of the regulatory environment, adding that they should be updated on the proposed amendments to Republic Act No. 9856 or the REIT Law as well as how new measures and provisions would stall or advance the sector.

In March, the House of Representatives approved on third and final reading House Bill No. 7525, which seeks to amend the REIT Law. A counterpart bill in the Senate has yet to be filed.

Some of the proposed amendments under the bill include requiring REITs to reinvest within one year from receipt of proceeds realized by the sponsor or promoter, as well as requiring REITs to submit a reinvestment plan to the Securities and Exchange Commission and Philippine Stock Exchange, and securing an annual certification to prove that they are compliant with their reinvestment plan.

Meanwhile, Colliers said that property developers should assess the ideal portfolio mix that would provide the optimal yield for investors. 

“Property firms should consider divesting asset classes that will provide highest dividend to investors based on these asset classes’ performance in the market,” Colliers said. 

“Office and industrial are usually part of developers’ portfolio mixes but property firms should also look at other viable assets in the future including retail and hotel,” it added. — Revin Mikhael D. Ochave