Thanks to Marvin Germo for giving us access to this REIT’s top decision maker. The REIT in focus is RCR from Robinsons Land.

RCR is the largest REIT (at the time of IPO), with the longest land leases and the widest geographic footprint. That’s an impressive claim but we need to dig deeper. At IPO, RCR is indeed the largest but when I look at its growth runway, it’s not as long as Ayala’s or Megaworld’s. Although I was just looking at the current office portfolio of the sponsor, Robinsons Land, and it would be a different story if they decide to infuse Robinsons Malls in the future. Something that was not stated in the interview.

With regards to having the longest land leases, well I don’t really see any advantage to that. Even if the other REIT’s land leases are shorter, they are owned by the sponsor or a related entity so it will be incomprehensible for the landlord-sponsor not to renew the lease of a building owned by its very own REIT anyway.

RCR has the widest geographic footprint among the REITs and that is reflective of the strategic direction of its sponsor. I do admire Robinsons Land for taking a different approach to the land development business. On one hand, they are fairly late to the estate / township development approach of Ayala and Megaworld. However, I’ve noticed that Robinsons Malls go to next tier cities in the provinces well before SM or Ayala have a presence. After some time, Robinsons then builds office buildings and hotels close to the mall. It would be interesting to see whether they will continue the strategy of building these integrated commercial complexes across many locations while recycling capital through RCR and growing the REIT as well. I wonder which strategy will yield better returns for REIT investors: the large estate / township development of Ayala and Megaworld in select areas or the smaller mall-anchored integrated commercial complexes spread out in more locations by Robinsons (and SM for that matter when they decide to list their REIT). We’ll have to keep an eye out on RCR’s dividends to find out.