WATCH BEFORE YOU INVEST IN REITs - (Honest Review) reit meaning, reit law, reit law philippines

Описание: Real Estate Investment Trust
stock corporation established principally for the purpose of owning income-generating real estate assets, such as apartment buildings, office buildings, medical facilities, hospitals, hotels, resorts, highways, warehouses, shopping centers, railroads, among others.
 Company must be listed in the Philippine Stock Exchange (PSE)

 REITs must have a minimum paid-up capital of Php 300 million, with 1,000 public shareholders, having at least 50 shares each.

 Returns are distributed to the investors in the form of dividends.

 should sell at least 1/3 of the outstanding capital stock of the REIT to the investing public. Proceeds from such sale must be reinvested within the Philippines.

 REIT must declare dividends annually at least 90% of distributable income

 3-years track record either of the REIT or the assets it owns. (3years of rental history)

 Maximum debt limit of 35% or REITs deposits property.

Classified into 3types:
1. EQUITY REITs
• earn profit through the collection of rental payments
• invests in the ownership and management of malls, hotels, commercial buildings and warehouses.

2. MORTGAGE REITs
earn through the interest rate paid by mortgagees

3. HYBRID
Mixed of equity and mortgage
Brief History

 RA 9856 shall be known as “The Real Estate Investment Trust Act of 2009”
Framework for REIT
Begun Dated Juy 27, 2009
Lapse into law on Dec. 17, 2009

 SEC Memo 1, Series of 2020
January 20, 2020
SEC Revised IRR

 BIR RR 3-2020
January 29, 2020

REIT How it works?
Income generating property:
1. Retail mall, shopping centers.
2. Office Building
3. Residential development, apartment buildings
4. Hotels, resorts, Leisure developmtnes
5. Industrial and commercial properties and immovable assets. (mobile phone towers, outdoor billboards, transmission lines, pipelines etc)




BENEFITS OF REITS TO INVESTORS

1. Affordable investment through stockbrokers (Boardlot)
2. No need to buy actual unit
3. No need to pay property tax
4. No need to pay association dues
5. May provide regular income dividends
6. Property Appreciation
7. Long term capital gains
8. Risk is diluted because REIT investment in a poll of property that managed by REIT Company
9. No headache of fixing broken plumbing and wirings nor do they have to deal with tenants and ask for rent.

Dividends may be given in a form of:
a. Cash
b. Property
c. Stocks


REITs vs Stocks
 Both can be publicly traded in PSE
 Stocks not required to pay dividends
 REITs required to pay dividends.




 REIT Companies in the Philippines
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