Post-Covid, it will just be a matter of time before our large mall developers fold them into REITs. We have plenty of potential properties: SM Prime has 86, Robinsons with 58 and Ayala has 27 shopping malls. We also have midsize chains like CityMall and the Gaisano group.

We, Filipinos, have a love affair with malls and that is why we have some of the largest in the world. They are more than just a place to buy things. We go there to meet friends and family; to relax, eat, watch a movie, pay bills and even to attend mass. With REITs seeking to own properties with a stable, recurring income, shopping malls would be a perfect fit. Among the big 3 mentioned above, two have already listed their respective REITs although AREIT and RCR both have mostly excluded their malls for now. Same with MREIT which haven’t yet acquired the 17 lifestyle malls from parent Megaworld. This may have something to do with the Covid-induced lockdowns temporarily affecting foot traffic and tenant leases.

SM Prime is yet to launch its own REIT and it will be a powerhouse when it does. SM Supermalls have a combined gross floor area (GFA) of more than 9 million sqm! In addition, SM Prime also has a portfolio of office buildings, convention centers and hotels.

We already have VREIT pave the way for investors interested in retail REITs since they included 10 community malls in their initial portfolio. Shopping malls have a variable component in their lease agreements with tenants so it will be interesting to see that play out in future REIT dividends. It will be interesting to see as well if current and future sponsors launch a specialized retail REIT or will they opt to grow a single diversified REIT instead (an option I would prefer).