By Ashley Erika O. Jose, Reporter
THE Securities and Exchange Commission (SEC) is planning to release the revised rules for Republic Act No. 9856, or the REIT Act, by the fourth quarter (Q4).
“We are doing the rounds before we rewrite the rules — the implementing rules and regulations (IRR) for the REIT… I think we can release the exposure draft maybe in the third quarter or early fourth quarter,” SEC Chairperson Francisco Ed. Lim told BusinessWorld on the sidelines of the Philippine Investment Conference 2025 last week.
In July, the corporate regulator said it was planning to revise real estate investment trust (REIT) rules to help strengthen the Philippine capital market by expanding eligible assets, lengthening the reinvestment period, and attracting broader participation.
For instance, the SEC is currently assessing and enumerating assets eligible for REITs, Mr. Lim said, adding that the regulator is also considering the possibility of extending the investment period.
A REIT is a stock corporation established to own income-generating real estate assets. Under current REIT rules, proceeds from REIT asset sales must be reinvested within a year.
“We will study extending the one-year investment period to a longer period, the utilization of funds because today if the sponsors raise capital by transferring their assets to REIT companies, they are limited to reinvesting in infrastructure or real estate assets,” he said.
The SEC is also studying other areas where sponsors can utilize the funds they raise in the REIT, Mr. Lim said, noting that this would give them flexibility in how they can use proceeds.
“We are also looking into a simpler process of registration if possible,” he added.
For China Bank Capital Corp. Managing Director Juan Paolo E. Colet, the market would welcome key changes to the REIT rules, particularly the expansion of reinvestment purposes.
“The clarity on what qualifies as REIT-able assets and how to apply the three-year track record requirement. These improvements could help spur more REIT initial public offerings and perhaps even follow-on offerings,” Mr. Colet said in a Viber message.
“We believe the SEC’s proposed amendments to the REIT framework are a constructive step toward enhancing market flexibility and encouraging more issuers to enter the REIT space, particularly relevant in today’s softer fundraising environment,” Unicapital Securities Equity said in a report.
However, Unicapital Securities said this may raise concerns among investors who value REITs for their “predictable” dividend streams.
“We believe that delays in capital deployment could result in slower dividend growth or temporarily lower payouts, potentially dampening near-term investor sentiment,” the report added.