Ayala Land to raise $500M via country’s 1st REIT listing

/ 03:05 PM April 24, 2019

MANILA, Philippines — The Real Estate Investment Trust (REIT) law, shunned by once-keen property giants due to restrictive public ownership and taxation rules, is getting its first taker. 

Property giant Ayala Land Inc. on Wednesday announced it plans to raise about $500 million listing certain office buildings in Makati City through the REIT framework, which allows companies to spin off recurring income assets as publicly-traded vehicles on the Philippine Stock Exchange.


“We hope to list within the year,” Jose Emmanuel Jalandoni, Ayala Land head of commercial business, said in a briefing held after the company’s annual meeting on Wednesday. 

“We are testing the framework so we will start with a few assets primarily Makati CBD [Central Business District] ,” he added, referring to Manila’s financial center that was largely developed by Ayala Land. 


The REIT Act was passed by Congress in 2009. But developers stayed away after the Aquino administration imposed restrictive rules as it feared revenue losses from the tax incentives. 

The current administration had succeeded in removing the taxation on property transfers to a REIT vehicle. Securities and Exchange Commission commissioner Ephyro Luis B. Amatong said earlier this month they were working stakeholders to lift a rule that required the REIT owner to eventually give up control of the company. 

The current guidelines require a REIT company to have an initial minimum public ownership level of 40 percent which should be increased to 67 percent in three years. Amatong said the target was to come up with a more relaxed set of rules by the second quarter of 2019. 

Ayala Land CEO Bernard Dy said Wednesday they would launch a REIT offer based on the current regulations. 

“We feel that it is a very good vehicle for us to be able to recycle some capital but we are also looking at it as a new business model,” Dy said. “We can also use this vehicle to acquire third-party assets. It doesn’t mean the only assets we will put in this vehicle are Ayala assets.” 

Jurisdictions with existing REIT frameworks include Japan and Singapore. 

For companies, they provide a fresh avenue to raise funds for other investments. Investors are likewise allowed to tap a new asset class, broadening their menu of options.


Apart from Ayala, SM Prime Holdings Inc. and Robinsons Land Corp. were among those keen on holding REIT offers.

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