The 5th Asia Pacific Real Estate Investment Summit Philippines was conducted at the Dusit Thani Hotel last 31 March 2017. With a theme “Unraveling the New Philippines: Heightened Optimism. Surging Investment”, the Summit featured speakers from several government agencies, including the SEC, DPWH and NEDA, as well as from several private business real estate groups.
The speakers pointed out that that the current Philippine environment is ripe for the investment into Real Estate Investment Trusts (“REIT”) with numerous catalysts supporting the same. However, the REIT is still plagued by over-restrictive requirements, such as a steep Minimum Public Ownership (“MPO”) of 67% on the 3rd year of operation as well as a mandatory 12% VAT on transfers from REIT sponsors to the REIT itself, among others. As a result of these restrictions, there has yet been no taker since the effectivity of the REIT Law in 2009. While the SEC has discussed possible restriction adjustments, such as lowering the MPO to a more manageable percentage, nothing concrete was promised nor was a definite timeline given.
The Summit speakers were in agreement that the Philippine regulatory agencies and legislators should take a cue from other countries, such as China, Australia, and the United States, and aim to make local REIT regulations as inviting to investors as possible. The general consensus was that the REIT has the potential to democratize the real estate market of the Philippines and fund the necessary infrastructure projects needed by local governments to ultimately generate income for private corporations and at the same time push the country’s development.
Apart from issues involving the Philippine REITs, upcoming government infrastructure projects, emerging cities such as Davao, and trends in tourism investment were also included in the Four-Point Summit Agenda.
The event was hosted by the Asia Pacific Real Estate Association (“APREA”), with Villaraza & Angangco as one of the Supporting Companies.