REITと外国人投資家のフィリピン熱が冷めてきた理由

REIT and why foreign investor interest is down in the Philippines

ざっくり言うと

• アジア太平洋地域でのフィリピンの投資ランキングが4位から8位に下がった
• 原因は、外国人所有権の厳しい制限とREIT会社が存在しないから
• REITへの参入障壁は、デベロッパーからREIT会社への譲渡にVATがかかることと、株式の67%を市場に公開しなければならないこと
• 法律の改正が必要ではないか？

REIT and why foreign investor interest is down in the Philippines

A REIT industry not only helps in drawing in potential foreign investors, the local public can also benefit from the investment tool

Foreign investors are no longer as drawn to the Philippines as before. The Philippines’ ranking in investment dropped from 4th place to 8th in the Urban Land Institution’s Emerging Trends Asia Pacific 2015 report. The report cited factors including the restrictive laws on foreign ownership, and the lack of a REIT industry, for the loss off investment attractiveness. During the launch of the report's panel, Alistair Meadows head of Jones Lang LaSalle’s International Capital Group in Asia Pacific also mentioned that the lack of opportunity to invest in the country has driven away would-be foreign investors. 

But a functioning REIT industry will not only give foreigners the opportunity to invest in Philippine real estate, it will also give the local public a bigger opportunity to continue boosting the already booming real estate industry of the country. Sadly, the average Filipino consumer might not even be aware of what a REIT is as well as the benefits of investing in REITs. This is despite the country having an existing REIT act since 2009.

To clear the confusion, a REIT or Real Estate Investment Trust, is an investment vehicle that acts much like the stock market. It gives everyone the opportunity to invest and own a portion of income-generating real estate assets without having to really go out and invest in or finance a property. Investing or purchasing a part of the real estate makes you a stock holder of that asset. The stock holders of a REIT corporation will earn through shares of income produced through the real estate investment. 

The country’s REIT act requires REIT corporations to distribute 90% of their distributable income to investors in the form of regular dividends. In return, these REIT corporations can receive special tax considerations as an incentive. To put things in perspective for investors, imagine getting a share from 90% of the income of an SM or an Ayala Mall? In addition to that, REIT is also highly liquid, meaning the investment can quickly be converted to cash when needed by the investor. With the public financing real estate assets, developers can recycle these investments and build new real estate assets or infrastructure, and the cycle goes on. It basically is a win-win for developers and potential investors.

Most of our Asian neighbors already have REIT industries off the ground, and all of them are enjoying the benefits. Hong Kong, Japan, Malaysia, and Singapore all have REIT industries. The collective market cap of Asia-Pacific’s REIT industries, including Australia, reached US$250 billion in the third quarter of 2014. A REIT industry can provide Filipinos with more ways to invest their money and will certainly generate billions of pesos, yet why have real estate developers not listed an REIT corporation?

The trouble is with the regulations and requirements that come with listing an REIT corporation. While REIT corporations are supposed to benefit from tax considerations, the BIR (Bureau of Internal Revenue) imposed a 12% value added tax for developers looking to transfer their assets into a REIT. REITs also have to give 67% of its minimum shares to the public by their third year. The amount is a difficult pill to swallow for developers, since the 67% percent basically means that they are giving more than half of their ownership to the public within three years of establishing your corporation.

Currently, the PSE (Philippine Stock Exchange) and the SEC (Securities and Exchange Commission) have been vocal on the act’s reform.  However, PSE’s CEO Hans Sicat expressed that we may have to wait a little longer for the first REIT to be established. At the same panel, Sicat said “The issue is the same as from a few years ago, i.e., the tax authority has not agreed with us in terms of implementing a structure that is user-friendly or competitive.”  He expressed that the issue has received a “lukewarm response” during their last few meetings with the government’s economic team and representatives of the private sector. “In terms of political will, we’re guessing that it may be after 2016 that they can actually respond.”

Co-panelist Alexander Cabrera, chairman and senior partner of Isla Lipana & Co, agreed with the sentiment that the REIT is a must-have. “It requires legislation. I think the laws should be amended… I think we should go back to the drawing board and Congress should make amendments to the REIT law,” he commented.

Will a Philippine REIT corporation ever see the light of day? It may be that only time (election time) will tell.

Photo from Flickr/Jun Acullador 

myproperty
2015/01/23 

図解入門ビジネス 最新不動産ファンドがよーくわかる本―不動産業界、金融業界の必須知識 (How‐nual Business Guide Book)