The Ayala North Exchange, the landmark gateway to the Makati Central Business District, was one of the original developments to be made part of AREIT Inc.’s property portfolio as it listed at the Philippine Stock Exchange.
The entry of the real-estate investment trust (REIT) will be a growth catalyst for the Philippine market, according to the country’s leading real-estate management and investment companies.
Property titan Ayala Land Inc. was the first developer to enter the market through AREIT Inc. (AREIT), the real-estate investment trust of Ayala Land Inc. (ALI), It recorded revenues of P1.95 billion in 2020 and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of P1.58 billion, 3 percent and 4 percent higher than its REIT plan, respectively. Ayala North Exchange, the landmark gateway to the Makati Central Business District, was one of the original developments to be made part of AREIT Inc.’s property portfolio as it listed at the Philippine Stock Exchange.
Sheila Lobien, chief executive officer of the Lobien Realty Group (LRG) told the BusinessMirror in an e-mail interview that investors should be in any investor’s portfolio because it is a safe investment with many safeguards and controls placed by the law on the REIT company before it can issue REIT.
“The increase in property values [especially if the land where the building is built is owned by the REIT company], the assured dividends as mandated by the law and the ease in buying the REIT stocks as the REIT company should be publicly listed, which also democratizes real-estate investing, are some of the reasons an investor may invest into REIT,” Lobien said.
She said the entry of REITs in the local market has democratized the investment field small players can now join the leading players in broadening their investment portfolio.
Lobien provided three items for potential REIT investors to address the risks. First, an investor must check the profile of the company and study all the data and information of the company issuing the REIT. He or she should assess the underlying assets the REIT company has and study if these assets can reasonably deliver the profitability objectives as committed by the REIT company, Finally, the investment should align with the investor’s overall investment profile.
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