Updates to REIT rules, rate cuts may attract listings, says ICCP

THE Securities and Exchange Commission’s (SEC) proposed updates to real estate investment trust (REIT) rules, alongside possible interest rate cuts by the central bank, could encourage more REIT listings, the Investment & Capital Corporation of the Philippines (ICCP) said.

“If interest rates come down, that would be good for REITs because issuers would be more encouraged to come to market as they would not have to offer very high dividend yields,” ICCP President and Chief Operating Officer Jesus Mariano P. Ocampo said in a statement on Tuesday. “REITs are a dividend story at the end of the day.”

Under the updated REIT rules, the SEC has expanded the definition of income-generating assets to include sectors such as power, infrastructure and telecommunications.

The rules, which took effect this month, also extend sponsors’ reinvestment deadlines and strengthen disclosure and governance requirements.

Mr. Ocampo said the changes could attract billion-peso REIT offerings from tollway operators, water concessionaires, fiber optic network providers, cell tower operators and data-center developers.

He added that the timing of the regulatory changes aligns with a more accommodative monetary environment.

The Bangko Sentral ng Pilipinas (BSP) has cut interest rates by 200 basis points since August 2024.

BSP Governor Eli M. Remolona, Jr. has said another rate cut remains possible at the central bank’s February policy meeting, citing subdued inflation and weak economic growth last year.

The central bank ended 2025 with an additional 25-basis-point cut on Dec. 11, bringing the key policy rate to 4.5%, the lowest in more than three years.

Mr. Ocampo cited the surge in REIT activity from 2020 to 2021, noting that low interest rates during that period helped spur listings.

As rates decline, pressure on issuers to offer elevated dividend yields eases, making public listings a more viable and attractive capital-raising option, he said.

However, Mr. Ocampo said actual listings would still depend on issuer readiness, asset valuation and broader market conditions.

ICCP is a medium-sized group with businesses spanning investment banking, venture capital, industrial-estate development and township development.

The Philippines has eight listed REITs — AREIT, DDMP REIT, Inc., Filinvest REIT Corp., RL Commercial REIT, Inc., MREIT, Inc., VistaREIT, Inc., Citicore Energy REIT Corp. and Premier Island Power REIT Corp. — Beatriz Marie D. Cruz