It was interesting to hear David’s thoughts on the Philippine real estate outlook, including REITs.

His outlook on REITs is very optimistic, with an anticipated total of 12 listed REITs or more within 2 years. For comparison, Singapore and Thailand have more than 40 REITs each so his estimates are not that far off. He also reasoned that the current crop of REITs will continue to grow and acquire more properties given the good valuations that the sponsors received for their assets – in the middle of a pandemic. Essentially, the only direction REITs are going to is up. He also pointed that there is a huge demand for REIT stocks from institutional investors seeking yield.

He suggested that smaller developers with only a handful of buildings can partner with existing REITs in order to raise capital. I find this to be a really good idea and I hope our REITs are open to this possibility. Currently, all of the REITs’ properties are from their respective sponsors but nothing actually prevents a REIT from acquiring properties from 3rd parties as long as it becomes accretive to the dividends.

David isn’t only bullish on REITs but in Philippine real estate in general. He pointed out that the safest markets are BGC, followed by Makati. He also mentioned the incredible demand for data centers and sustained demand for office space from the BPO industry – even with work-from-home arrangements due to the pandemic. Although many real estate professionals, like David, tend to talk up real estate, I actually agree with him that all of this demand is anchored on our young and growing population. Basically, real estate (including REITs) will be a major beneficiary of the Philippines’ demographic dividend.