I encourage you to watch the above 2021 interview if you’re interested in FILRT. It’s always goood to hear about a REIT’s direction straight from the source.
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RA 9856 states that at least 75% of a REIT’s deposited property must be income-generating real estate. At the moment, we have five office REITs, one retail (VREIT) and a renewable energy – CREIT. Some REITs also have a little bit outside their main offering. For example, AREIT owns industrial land in Laguna Technopark; MREIT owns a hotel and some ground floor retail in its buildings; and VREIT has 2 office buildings in its portfolio.
As REITs gain traction, we can see more types soon:
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If a REIT pays out 90% of its distributable income, how does it fund property acquisitions and grow?
The short answer is debt and equity.
REIT’s are allowed to borrow up to 35% of the value of its properties. It can even exceed that percentage if it is a highly rated borrower.
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Philippine REITs haven’t been around that long and the very first REIT only listed in 2020. So it would not be fair to compare our REITs with the Philippine Stock Exchange Index (PSEi).
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I encourage anyone interested in CREIT to watch the video above and I’ll highlight the interesting points below.
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