REITs are bought and sold in the Philippine Stock Exchange and are subject to investor supply and demand. Economics 101: If demand is great, the price goes up; if the demand is low, the price goes down. In challenging economic times, there will be more sellers of REIT compared to buyers of REIT and this will cause its price to become cheaper. Is that a bad thing? It is – if you’re a seller. But if you’re a regular buyer of REIT and a long term holder, then times like these are a cause for celebration! Its like buying a piece of clothing or gadget on sale. Shoppers are very happy to buy items at a discount during a sale so why should it be any different for investors.

I started regularly buying AREIT since 2020 and have bought at 25 pesos per share all the way to 50 pesos per share. My latest purchase was at 35 pesos per share. I don’t have a crystal ball and don’t know its future price movement so I simply invest regularly, collect the quarterly dividend and reinvest them as well. Over time, I hope to earn enough passive income to cover my cost of living.

Going back to the original question on how to remain calm. Firstly, understand your WHY? Why are you investing in a REIT. As stated previously, my own reason for doing so is to earn passive income that grows over time. In that context, the price should not really matter if I have no intention of selling them. Afterall, why would you sell the goose that lays the golden egg. Just keep the goose and keep collecting the eggs! After understanding your why, you should also understand the REIT itself. In my case, did AREIT’s tenants leave? did the rents go down? did the buildings burn down in a fire? None of the above happened. On the contrary, AREIT added more buildings, occupancy was high at 98%, tenants paid rent, and most important of all, the quarterly dividends increased.

Not all REITs are created equal though and a falling price could reflect the underlying fundamentals of the REIT itself. A telling example would be DDMP REIT. Its over a year old already yet it has not acquired more property other than DD Meridian Park in the Bay Area. Its POGO (Philippine offshore gaming operators) tenants were also adversely affected at some point. There is news about DoubleDragon going into warehouses and logistics. Whether these assets get added into DDMP REIT remains to be seen.