After years of waiting for favorable REIT rules and regulations to be approved, firms have no intention of letting COVID-19 derail share offering plans. DoubleDragon became the second Philippine developer to announce a REIT launch in 2020.
The Department of Finance, Securities and Exchange Commission, Bureau of Internal Revenue and Philippine Stock Exchange signed off on the new REIT rules at the start of the year. Developers had been lobbying for the rule changes for almost decade.
Ayala Land was the first developer to submit a REIT application in the Philippines, doing so in January. According to BusinessWorld, the Ayala Land REIT includes three commercial developments in Makati: Solaris One, Ayala North Exchange and McKinley Exchange.
Despite the COVID-19 pandemic causing a property market slowdown, Ayala Land Offices Head Carol T. Mills told the website that the firm is committed to launching its REIT in 2020.
DoubleDragon readies 2020 REIT launch
Developer DoubleDragon is preparing a PHP11 billion REIT launch that will take place during the fourth quarter. The company has decided to go ahead with plans to bring it to the market in 2020 despite economic uncertainty caused by COVID-19.
In an interview with BusinessWorld, DoubleDragon Chairman Edgar J. Sia II explained, “Although there is a global pandemic now going on, there are still investors looking to invest in specific companies that they think have a good, relevant and resilient portfolio. Right now, what matters the most is the long-term relevance and resilience of the business model more than anything else.”
Both DoubleDragon and Ayala Land will reinvest money generated from the REIT launches into their respective businesses. According to Santos Knight Frank, this reinvestment will contribute to the growth of the entire Philippine property sector and is the main benefit of the new REIT guidelines.
“We anticipate that REITs will drive an increase in acquisition, consolidation, and property development activities across the Philippines in the coming years. New capital raised by the developers through REITs will enable expansion of the real estate sector not only in Metro Manila but also in the provinces, and with it generate jobs across many sectors,” Kash Salvador, Associate Director for Investment & Capital Markets, Santos Knight Frank, noted.
lifted from this article: https://www.dotproperty.com.ph/blog/philippine-developers-still-focused-2020-reit-launches
all credits goes to Dot Property Philippines
