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REITs own income generating real estate. You may find that in some properties, the REIT owns the building and leases the land (usually from the sponsor). In others, it wholly owns the entire property, including the freehold land. Is one better than the other?

Not all REITs are created equal and as investors, we need to carefully weigh where to put our hard earned savings. Afterall, it’s difficult to find that extra money in the first place. It also pays to heed Warren Buffett’s two investing rules: 1. Don’t lose money; 2. Don’t forget rule number one.

Five of the seven Philippine REITs are primarily office REITs so most of the discussion below will center around those. Here are the things that I look for in a great REIT:

In the Philippines, we have developers like Ayala, Megaworld, Filinvest, Robinsons and Vista Land list their respective REITs (SM Prime being conspicuously absent). But why would they do that? Why not just hold on to their commercial properties and collect the rent?

REITs allow you to have a share in income producing Philippine real estate without doing a lot of work. The whole process is very easy, especially if compared to buying physical property and renting it out yourself.