Ayala Land to pioneer REIT listing in PHL

Ayala Land Inc. is eyeing to be the very first property firm to list its assets under the Real Estate Investment Trust (REIT) framework, a decade after the law was passed by Congress.

In a media briefing after the company's stockholders' meeting in Makati City on Wednesday, Ayala Land president Bernard Vincent Dy said the property developer has applied for an application with the Securities and Exchange Commission (SEC) "for the first REIT listing in the Philippines."

"We filed with the SEC a REIT. Actually Ayala Land REIT. We are actually [thinking about] what name it should be," Jose Emmanuel Jalandoni, head of Ayala Land's commercial business and senior vice president, said in the briefing.

Jalandoni said Ayala Land applied to change the name of its unit One Dela Rosa Inc. to Ayala Land REIT Inc. to serve as the vehicle for the listing.

The REIT Act was passed in 2009, which would have allowed companies to list its real property assets on the Philippine Stock Exchange as a new vehicle to raise funds for other investments and expansion initiatives.

However, ten years after the law was enacted, the REIT framework faced issues such as the 67-percent minimum public ownership requirement as well as taxes on property transfers and additional income generated.

"The intent is to list based on current regulations which is a minimum ownership of 67 percent," Jalandoni said.

"We are working with BPI (Bank of the Philippine Islands) as underwriter for this and we hope to list within the year with the appropriate approvals," Jalandoni said.

The Ayala Land official said it will start to list few assets, primarily in the office towers in the Makati Central Business District.

The property firm is eyeing to raise "half-a-billion dollars" or up to P26 billion from the REIT listing.

"We feel like it’s a very good vehicle for us—we’ll be able to recycle some capital but we’re also looking at it as a new business model for us to be able to grow this REIT into another leg for the organization," Dy said.

"We will also use this vehicle to basically acquire third-party assets. It doesn’t mean that the only assets that we will put in this vehicle are the Ayala Land assets. We could actually explore third-party assets as well to be used into this REIT vehicle," Dy added.

Jalandoni, for his part, said Ayala Land will test how the domestic market will receive its REIT initiative.

"Because of the size, half-a-billion dollars, I think the domestic market can absorb it," Jalandoni said. —KG, GMA News