Santos Knight Frank Exec Says PHL Can Be Asian REIT Upstart
An executive officer in one of the Philippines' top integrated real estate service provider said that the country could become a 'sensation' in real estate investment trust (REIT). According to Business Mirror, Santos Knight Frank (SKF) chairman and CEO Rick Santos believed that the country had what it takes to create waves as a REIT newcomer.
Santos had the idea that REITs have the 'power' to provide democracy to the Philippine property market, which is currently dominated by big names and large corporations. With REITs, Santos also believed that an individual investor can be bought on par with these names, creating a way for them to invest in high-value real estate assets.
REITs have a way in opening new paths for Philippine's capital markets to grow, he added. New capital for developers meant an expansion of the real estate sector inclusively--not just in Metro Manila, but also for the nearby provinces. REIT companies will also benefit investors, as they are mandated by regulations to disburse 90 percent of the retained earnings as dividends for these investors.
REITs have been hailed as a 'rising' asset class in Asia. Business Times SG reported that listings in the Asia-Pacific region have grown steadily over the decade, with the number of REITs in the region grew from 50 to 792. The growth rates are impressive, knowing that most of the countries in the region didn't have existing REITs before.
It is also especially impressive to note that most of the countries that already have REITs don't have them at a developed state. The REIT market has been in most developed countries in the Asia-Pacific. Meanwhile, emerging markets have also started to develop their own REIT frames; the Philippines and India are some of the exciting markets to watch.
The Philippines have especially created an environment for REITs to thrive. Taxes on VAT transfers have been basically zeroed and the local securities exchange commission has also hinted at lowering the minimum public ownership requirement. These moves, combined with one of the fastest growing population rates in Asia, have been promising so far.
Santos pushes for 'now' as the right time to introduce REIT in the country, since the current business environment and growth rate is accommodating. REITs have also outperformed its non-REIT counterparts, he added. Such market growths have happened in countries like Australia, Japan, Hong Kong, and Singapore.