The start of the new year is a good time for laying out future plans and this post aims to examine some of the 3-year investment plans of several REITs. A good criteria for goal setting is using the acronym SMART – which stands for specific, measurable, attainable, realistic and time-bound. Which REITs have set out SMART goals?

Reading through their public disclosures, we can clearly identify the REITs with solid 3-year plans and those with plans that are well, generic.

Take AREIT, for example. Their 3-year investment plan, in my opinion, is the gold standard: It plans to continue expanding its portfolio of assets at an average of 100,000 square meters of gross leasable area annually from 2023 to 2025. AREIT is also keen on growing and diversifying its asset portfolio in terms of sector, location and income contribution, funded through leverage and equity. The company plans to pursue accretive acquisitions and to ensure borrowings are within the aggregate maximum leverage limit of 35 percent of deposited property value. Aside from continuing to expand its portfolio of quality commercial assets, it also intends to diversify into other asset classes, such as shopping malls, given the recovery and reopening of the economy. AREIT is targeting to achieve 10 to 12 percent of total shareholder return through organic growth, new acquisitions and from three to five percent rental escalations from operating assets. As I said earlier – this is the gold standard and a fine example of a SMART investment plan.

Another good example would be MREIT’s 3-year plan: MREIT maintains its accelerated growth plan to increase the Company’s portfolio GLA to 500,000 sqm by the end of 2024. As opportunity arises, the Company may choose to diversify to other high-growth geographic areas like Cebu, Bacolod, and Pampanga, and other growth areas in the country where the Sponsor’s townships are located. Diversification plans include investment in other types of real estate properties, to include industrial, logistics, warehouse, other real property sectors that meet the Company’s investment criteria for Grade A, centrally-located, stably occupied, and income
producing properties. MREIT will achieve an annual total shareholder return of at least 10% through organic growth and new acquisitions.

The above plans from AREIT and MREIT are very good SMART goals and I wish them well in executing those plans. Next up would be examples of generic 3-year plans that don’t really give plenty of details.

Take this one from PREIT: Its objectives are to grow and diversify the portfolio on power generation. It will maximize returns to investors by efficient utilization of current properties; organic growth and new acquisitions.

Here’s from DDMPR: It aims to diversify its tenancy mix accross various industries. It will achieve sustainable growth in distribution through contracted escalation rates and cost efficient operation of the properties. It will achieve long term growth in asset value by continually enhancing existing assets and expanding the portfolio.

Honestly, I feel like the above 2 plans were just put out to comply with SEC requirements or perhaps its a telltale sign that these REITs have a slow or non-existent plan to grow? I mean, DDMPR listed in 2021 but it has not yet added any asset to its Meridian Park commercial block in Pasay.