The law creating the Philippine Real Estate Investment Trust (REIT) is Republic Act 9856, also known as the “Real Estate Investment Trust Act of 2009”. The law was passed by the Philippine Congress and signed into law by then-President Gloria Macapagal-Arroyo on December 22, 2009. However, it wasn’t until the revised guidelines from the SEC, under President Duterte in 2020, were released that it really took off.

The law aims to provide an additional financing option for real estate developers and to provide investors with an opportunity to invest in real estate projects through the purchase of REITs. REITs are trusts that hold a portfolio of income-generating real estate assets, such as commercial properties, and pay out a large portion of the income they generate to shareholders as dividends.

Under the law, a REIT can be established by any corporation that meets certain requirements, including having a minimum of 1000 public shareholders, and maintaining a minimum public float of at least thirty-three percent (33%) of the total issued and outstanding shares.

The law also requires that at least seventy-five percent (75%) of a REIT’s assets must be invested in income-generating real estate assets and at least ninety percent (90%) of its annual net income must be distributed to shareholders as dividends. Additionally, the law provides a number of tax incentives for REITs, including exemptions from certain taxes, to encourage the development of REITs in the Philippines.

The law was enacted to provide an additional financing option for real estate developers as well as provide an investment option for the public. It is an important legislation that allows for the development and growth of the real estate industry in the Philippines. It is important for investors to understand the law and its provisions before investing in REITs, and to always read widely before making any investment decisions.