Are We Right About Real Estate Investment Trusts (RITs)? This is a great yes, according to experts in the recently aired webinar, “Are we right about RIET?” Which was organized by the Property Division of the Philippine Daily Inquirer? Eduardo V, President of Video Capital and Investment Corporation, was present at the live broadcast event. Francisco was; Atti. Francisco Ed. Lim, Angara Abello Concepcion Regala and Senior Legal Adviser to the Cruise Law Office; April Lynn Tan, First Vice President of Corporate Strategies and Director of Investor Relations at COL Financial; And David Lechiu, co-founder and CEO of Lechiu Property Consultants Inc.
There has been a lot of enthusiasm for RIT in the last 12 months, especially since the two active real estate players in the country have successfully completed their respective initial public offerings to their RIIT firms. Ayala Land ARIET was the screen-riser of RIIT, which raised an estimated P13.6 billion from its IPO in August. This was followed by DDMP RIT of Double Dragon, which completed its initial public offering in March this year. And now, more companies are doing the same. RIIT income-generating refers to a business established for the purpose of owning real estate assets that can provide investors with a return on income from rent.
These assets include office space, shopping malls, service apartments, hotels and resorts, medical and hospital facilities, roads, railways and warehouses. What makes it even more attractive is that RIITs have to distribute 90 per cent of their unchanged income to their shareholders.
“For Filipino investors, RIAT is a good asset class to invest in. It’s relatively safe. Of course, nothing is silly, but the kind of RIIT that is coming out is all good RIIT. They have good sponsors, good repeat role models, good there is management,” Francisco said. “I am working at two more RIITs, so there could be six to seven RIITs before the end of this year. If you are looking for a sign that REIT is a good investment class, many issuers go from market to market to take advantage of it. This is a very good new asset for you to consider as an investor … because you can get almost regular dividend yields that can go even higher and there is also a capital appreciation so that you can achieve the best of both worlds.