Real Estate Investment Trust

Direct access to the Philippine real estate market without large capital outlay

Asset management handled by real estate professionals

Regular dividend payouts

Information transparency and timely company disclosures, including share price, company
performance, investment strategy, etc.

REIT Explained

Overview

A Real Estate Investment Trust (“REIT”) is a stock corporation established principally for the purpose of owning income-generating real estate assets, such as apartment buildings, office buildings, medical facilities, hospitals, hotels, resorts, highways, warehouses, shopping centers, railroads, among others. It is a type of investment instrument that provides a return to investors derived from rental income of the underlying real estate asset. Returns are distributed to the investors in the form of dividends.

A REIT entity begins with a Sponsor who provides and transfers income-generating real estate assets into the REIT corporation. In exchange for the property, the sponsor receives equity ownership over the REIT corporation. In compliance with section 5.1.a. Minimum Public Ownership of the SEC REIT Implementing Rules and Regulations (IRR), the sponsor should sell at least 1/3 of the outstanding capital stock of the REIT to the investing public. Proceeds from such sale must be reinvested within the Philippines.

In terms of organization and governance structure, A REIT shall comply with the Revised Code of Corporate Governance and pertinent provisions of the SRC and its IRR. On top of which, a REIT shall appoint a fund manager, a property manager and a property valuer. A fund manager implements the investment strategy of the REIT, as well as, oversees and coordinates property acquisition, leasing, operating and financial reporting, among others. On the other hand, a property manager plans the tenant mix, identifies potential tenants, formulates and implements leasing strategies, as well as, maintains and manages the physical structures of the real estate properties. Lastly, a property valuer performs a full valuation of the REIT’s assets at least once a year and provide valuation report on real estate to be acquired or sold by the REIT. In exchange for the services rendered, the REIT corporation shall pay management fee of no more than 1% of the Net Asset Value of the assets under their respective management.

https://www.pse.com.ph/real-estate-investment-trust/