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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.
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.
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| Guidelines for Broker Eligibility to Trade REIT Securities |
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| Guidelines for REIT Training Sessions |
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| Application Form for Eligibility to Trade REIT Securities |
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| Nominee’s Letter of Attestation |
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| Sworn Certification of Operational Readiness |
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| REIT Overview |
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| Backgrounder on REIT |
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| PSE Listing Rules on REITs |
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| SEC IRR on REITs |
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| BIR Revenue Regulations on REITs |
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For REIT Rules and Regulations, CLICK HERE
| TP Name |
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| A & A SECURITIES, INC. |
| A.T. DE CASTRO SECURITIES CORPORATION |
| AAA SOUTHEAST EQUITIES, INC. |
| AB CAPITAL SECURITIES, INC. |
| ABACUS SECURITIES CORPORATION |
| ALAKOR SECURITIES CORPORATION |
| ALPHA SECURITIES CORPORATION |
| ANSALDO GODINEZ & CO., INC. |
| AP SECURITIES INCORPORATED |
| APEX (PHILIPPINES) EQUITIES CORPORATION |
| ASIA PACIFIC CAPITAL EQUITIES AND SECURITIES CORPORATION |
| ASIASEC EQUITIES, INC. |
| ASTRA SECURITIES CORPORATION |
| AURORA SECURITIES, INC. |
| B. H. CHUA SECURITIES CORPORATION |
| BA SECURITIES, INC. |
| BDO SECURITIES CORPORATION |
| BELSON SECURITIES, INC. |
| BERNAD SECURITIES, INC. |
| BPI SECURITIES CORPORATION |
| CAMPOS, LANUZA & COMPANY, INC. |
| CENTURY SECURITIES CORPORATION |
| CHINA BANK SECURITIES CORPORATION |
| CLSA PHILIPPINES, INC. |
| COHERCO SECURITIES, INC. |
| COL FINANCIAL GROUP, INC. |
| CREDIT SUISSE SECURITIES (PHILIPPINES), INC. |
| CTS GLOBAL EQUITY GROUP, INC. |
| CUALOPING SECURITIES CORPORATION |
| DA MARKET SECURITIES, INC. |
| DAVID GO SECURITIES CORPORATION |
| DBP-DAIWA CAPITAL MARKETS PHILIPPINES, INC. |
| DIVERSIFIED SECURITIES, INC. |
| E. CHUA CHIACO SECURITIES, INC. |
| EAGLE EQUITIES, INC. |
| EAST WEST CAPITAL CORPORATION |
| EASTERN SECURITIES DEVELOPMENT CORP. |
| EQUITIWORLD SECURITIES, INC. |
| EVERGREEN STOCKBROKERAGE & SECURITIES, INC. |
| F. YAP SECURITIES, INC. |
| FIDELITY SECURITIES, INC. |
| FIRST INTEGRATED CAPITAL SECURITIES, INC. |
| FIRST METRO SECURITIES BROKERAGE CORPORATION |
| FIRST ORIENT SECURITIES, INC. |
| G.D TAN & CO., INC. |
| GLOBALINKS SECURITIES & STOCKS, INC. |
| GOLDEN TOWER SECURITIES & HOLDINGS, INC. |
| GOLDSTAR SECURITIES, INC. |
| GUILD SECURITIES, INC. |
| H.E. BENNETT SECURITIES, INC. |
| HDI SECURITIES, INC. |
| I. B. GIMENEZ SECURITIES, INC. |
| IGC SECURITIES, INC. |
| IMPERIAL DE GUZMAN, ABALOS & CO., INC. |
| INTRA-INVEST SECURITIES, INC. |
| INVESTORS SECURITIES, INC. |
| J. P. MORGAN SECURITIES PHILIPPINES, INC. |
| J.M. BARCELON & CO., INC. |
| JAKA SECURITIES CORPORATION |
| JSG SECURITIES, INC. |
| LARRGO SECURITIES CO., INC. |
| LITONJUA SECURITIES, INC. |
| LOPEZ, LOCSIN, LEDESMA & CO., INC. |
| LUCKY SECURITIES, INC. |
| LUYS SECURITIES COMPANY, INC. |
| MACQUARIE CAPITAL SECURITIES (PHIL), INC. |
| MANDARIN SECURITIES CORPORATION |
| MARIAN SECURITIES, INC. |
| MAYBANK ATR KIM ENG SECURITIES INC. |
| MDR SECURITIES, INC. |
| MERCANTILE SECURITIES CORPORATION |
| MERIDIAN SECURITIES INCORPORATED |
| MOUNT PEAK SECURITIES, INC. |
| NEW WORLD SECURITIES CO., INC. |
| OPTIMUM SECURITIES CORPORATION |
| PAN ASIA SECURITIES CORPORATION |
| PAPA SECURITIES CORPORATION |
| PHIL-PROGRESS SECURITIES CORPORATION |
| PHILIPPINE EQUITY PARTNERS, INC. |
| PHILSTOCKS FINANCIAL, INC. |
| PLATINUM SECURITIES, INC. |
| PNB SECURITIES, INC. |
| PREMIUM SECURITIES, INC. |
| QUALITY INVESTMENTS & SECURITIES CORP. |
| R. COYIUTO SECURITIES, INC. |
| R. NUBLA SECURITIES, INC. |
| R.S. LIM & COMPANY, INC. |
| RCBC SECURITIES, INC. |
| REGINA CAPITAL DEVELOPMENT CORPORATION |
| REGIS PARTNERS, INC. |
| RTG & CO., INC. |
| S.J. ROXAS & COMPANY, INC. |
| SALISBURY BKT SECURITIES CORPORATION |
| SARANGANI SECURITIES, INC. |
| SB EQUITIES, INC. |
| SECURITIES SPECIALISTS, INC. |
| SINCERE SECURITIES CORPORATION |
| SOLAR SECURITIES, INC. |
| STANDARD SECURITIES CORPORATION |
| STAR ALLIANCE SECURITIES CORP. |
| STRATEGIC EQUITIES CORPORATION |
| SUMMIT SECURITIES, INC |
| SUNSECURITIES, INC. |
| SUPREME STOCKBROKERS, INC. |
| TANSENGCO & CO., INC. |
| THE FIRST RESOURCES MGT & SEC. CORPORATION |
| TIMSON SECURITIES, INC. |
| TOWER SECURITIES, INC. |
| TRANS-ASIA SECURITIES, INC. |
| TRITON SECURITIES CORPORATION |
| UBS SECURITIES PHILIPPINES, INC. |
| UCPB SECURITIES, INC. |
| UNICAPITAL SECURITIES, INC. |
| UOB-KAY HIAN SECURITIES (PHILIPPINES), INC. |
| UPCC SECURITIES CORPORATION |
| VALUE QUEST SECURITIES CORPORATION |
| VC SECURITIES CORPORATION |
| VENTURE SECURITIES, INC. |
| WEALTH SECURITIES, INC. |
| WESTLINK GLOBAL EQUITIES, INC. |
| WONG SECURITIES |
| YAO & ZIALCITA |
| YU & COMPANY, INC. |
A REIT in the Philippines, although designated as a “trust”, does not have the same technical meaning as “trust” under existing laws and regulations of the Philippines. The terminology “REIT” was simply adopted to align with the global best practices. In the Philippines, REIT is established as a corporation and is likewise covered by the Securities Regulation Code (SRC) of the Philippines.
As defined under Rule 3.q. of the SEC Implementing Rules and Regulations on REIT, “Income-generating Real Estate means real property which is held for the purpose of generating a regular stream of income such as, but not limited to, rentals, toll fees, user’s fees, ticket sales, parking fees, storage fees” and the like, as may be further defined and identified by the Securities and Exchange Commission (SEC). The SEC may promulgate rules to include real rights over real property, provided they generate interest or other regular payments to the REIT.
Intrinsically, REIT as a product has many benefits, including but not limited to, [1] direct access to the Philippine real estate market without large capital outlay, [2] asset management handled by real estate professionals, [3] regular dividend payouts, and [4] information transparency and timely company disclosures, including share price, company performance, investment strategy, etc.
In the Philippines, REIT is a new asset class. It will allow investors to diversify their current portfolio holdings. Furthermore, OFWs who invest in Philippine REIT will enjoy a dividend tax exemption for the first seven years from effectivity of the tax regulations.
In accordance with Rule 4 Section 4 of the SEC Implementing Rules and Regulations on REIT, “a REIT shall distribute annually a total of at least ninety percent (90%) of its Distributable Income as dividends to its shareholders, not be later than the last working day of the fifth (5th) month following the close of the fiscal year of the REIT.” As such, that is definite. As long as the REIT is profitable, it will declare dividends to its shareholders.
Distributable Income, as defined under Rule 3.m. of the SEC Implementing Rules and Regulations on REIT, means “net income as adjusted for unrealized gains and losses/expenses and impairment losses, and other items in accordance with internationally accepted accounting standards.” It is revenue after deduction of all expenses and reserves intended for specific reasons, such as renovations or refurbishing of the assets. However, distributable income is not fixed year-on-year as there are typically changes to the rental fees, occupancy rates, and operating costs of the properties held by a REIT.
Investment in the REIT shall be by way of subscription to or purchase of shares of stock of the REIT company. Investors will need an account with an eligible stockbroker and an NoCD account with the central depository to be able to trade REIT securities through the Philippine Stock Exchange. Furthermore, to participate in the Local Small Investors (LSI) program for initial public offerings (IPO) of REIT companies, investors will need to duly register to the PSE EASy platform.
The REIT Law together with its IRR, has rules on minimum public ownership, conflict of interest, related party transaction, limitations on compensation and fees paid by a REIT, restrictions on investment activity of a REIT, fit and proper rule and rules on oversight of independent directors. As a listed company, the REIT will be subject to the Disclosure Rules of PSE and the stringent rules of SEC. Penalties for erring REITs are also in place.
Yes, a Philippine “REIT may invest in income-generating real estate located outside of the Philippines; provided, that such investment does not exceed forty percent (40%) of its Deposited Property and only upon special authority from the Securities and Exchange Commission” as stipulated under Rule 5 Section 1 of the SEC Implementing Rules and Regulations on REIT.
Yes. A newly formed REIT invokes the track record or operating history of its income-generating real estate assets and submits to PSE the audited financial statements and any other supporting documents that reflect the track record or operating history of the REIT’s income-generating real estate assets for the applicable period.
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