TO BOOST investor awareness and local participation in the country’s stock market, the Philippine Stock Exchange (PSE) introduced its latest product, the Real Estate Investment Trust (REIT), to the Cebuano business community last week.

“We have conducted our first roadshow here in Cebu because we see a lot of potential in increasing our investor base.

There are a lot of investable companies here,” said lawyer Val Antonio Suarez, chief executive officer of the PSE, during the GreenTrepreneurship Conference at the Cebu International Convention Center.

REIT is a stock corporation created for the purpose of owning and managing income-generating real estate, such as office buildings, residential condominiums, shopping centers, hotels, warehouses, hospitals, airports and tollways.

Suarez said Cebu is one of the favorable markets for REIT outside of Metro Manila because of its upbeat real estate industry and its booming business process outsourcing industry.

Suarez reported that of the 250 companies listed in the country’s stock exchange, more than 15 percent or 39 firms are real-estate related.

Yearend

“We are targeting at least two big firms for REIT listing before the year ends,” Suarez said on the sidelines of the conference.

He said about 20 firms have expressed interest in REIT listing.

Republic Act 9856 or the REIT Act of 2009 requires REITs to list their shares of stock on the PSE. The REIT distributes 90 percent of its distributable income to investors in the form of regular dividends and receives special tax considerations as an incentive.

“This investment instrument allows investors—especially small or retail investors-to participate in the ownership of one or more income-generating real estate (firms),” he said.

The PSE said property companies with predictable cash flows could form REITs to facilitate the realization of their projected gains ahead of time. This translates to immediate access to fresh capital, which may be plowed back into new projects and investments, redounding to new jobs and bringing economic development.

Ayala Land Inc., SM Development Corp., Robinsons Land Corp. and Megaworld are among the country’s major real estate

development companies that have expressed their intention to organize REITs to avail themselves of the benefits of the law.

PSE reported that there are more than 193 publicly traded REITs in the United States, with assets surpassing $500 billion.

In Australia, listed property trust assets have reached $106 billion, while property trust assets in Singapore are valued at $25 billion.