PSE president Ramon Monzon credited Dominguez for opening up another avenue for investors to participate in the country’s realty story.
“Secretary Dominguez is the godfather of REIT. (There wouldn’t be a market) without him,” said PSE president Ramon Munoz in a briefing.
“It took Secretary Dominguez to say the rules will not promote listing of REITs. He was instrumental in changing the tax and SEC (Securities and Exchange Commission) rules on REITs, “ he added.
To attact companies to tap the REIT market, the DOF, BIR and SEC exempted from the 12 percent VAT the transfer of property in exchange for shares for control in a REIT, in accordance with Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
The BIR further removed the requirement for a REIT to place in escrow, in favor of the Bureau, the income tax collectible from the REIT on dividends declared and deducted from its taxable income, as well as the 50 percent documentary stamp tax (DST) given as incentive on the transfer of real property to the REIT.
REITs were previously required to maintain a 40-percent public ownership in the first year of their listing. Prior to its amendment, REITs were required to increase their public float to 67 percent within three years from their listing.
The revised IRR lowered the minimum public ownership requirement in line with the provision of the REIT Act that a REIT company must have at least 1,000 public shareholders each owning at least 50 shares of any class of shares and, in aggregate, at least one-third of the outstanding capital stock.
To date, there are two REIT firms listed at the PSE — AREIT Inc.of the Ayalas and DoubleDragon Properties’ DDMPR.
Three more firms realty have signified their interest to tap the REIT market. They are Gokongwei-led Robinsons Land Corp., Megaworld’s MREIT and bilyonaryo Manny Villar’s Vista Land & Lifescapes Inc.
REITs manage real estate assets such as hotels, office buildings and malls that regularly generate profits and hand out dividends to stockholders.
Monzon said the pandemic has been a boon to the PSE as its capital raising activities have ballooned to P122.46 billion in the first half this year, which is more than the P103.6 billion it raised for the whole of 2020.
“There’s a silver lining in every cloud. Because of the pandemic, debt financing, while cheap, became difficult because banks had to tighten their lending standards. A lot of the companies had to borrow and they were reaching their credit limits but the need for capital continues. They had to go to the equities market. Another factor is the opening of REIT listing at the exchange,” said Monzon.
SOURCE: Bilyonaryo
