INTERVIEW in the Southeast Asian REIT market .
We believe the key is for Philippine REITs to be structured properly , its assets to be best-performing and for developer sponsors to take a long-term view to grow the REIT . REITs should not be viewed as an avenue for a one-time liquidation .
Unique to our country ’ s REIT law is the requirement to reinvest proceeds of the sale of an asset to the REIT within one year in the Philippines . This makes Philippine REITs a powerful tool to catalyse and spur investments in the local market and push the country towards the path of recovery .
We have also recently observed a growing participation of local retail investors in our stock exchange . This comes at a good time as we launched the REIT as a new product here . Local investors have a new addition to their menu of investments enabling them to balance their portfolio and choose a new product that is suitable to their individual profile .
“ With the significant amount of commercial properties in the Philippines , we hope that the country will also be recognised among its peers in the Southeast Asian REIT market .”
Just recently , Ayala REIT has announced its venture into industrial space leasing via an acquisition . What are your expansion and acquisition plans in the next few years ?
We have major growth plans for AREIT this year . We do plan to inject more offices and eventually other asset classes as well . Our locations will be diversified similar to that of Ayala Land where it has major presence in key growth cities for commercial property in Metro Manila and the provincial cities like Cebu . We see the benefit of diversification in terms of location so there is no concentration risk in just one area .
AREIT has a large capacity to expand given that we have much room to leverage for growth . It also has a capacity to grow via equity . In all our planned acquisitions , these new assets will be accretive to the dividends of our shareholders . Thus , AREIT
“ The independence of our property and fund management companies is clearly defined with majority of its directors being external ”
can grow both organically and inorganically . Organically from contracted escalations and operating improvements of our existing buildings and inorganically from new acquisitions .
How are you looking to take advantage of the fact that you are an early entrant in the Philippine REIT market ?
It ’ s not easy being the first , but it does have advantages . Getting AREIT to list first , stabilising it early on , and priming it for growth gives us a head start now in establishing AREIT as a best-inclass REIT . More than just being a first mover , importantly , we want to make sure we always do things right and that AREIT ’ s business remains fundamentally sound . This means ensuring that our properties are well-selected , well-managed , and that the company is delivering financial performance poised for growth .
Beyond financial performance , we are positioning AREIT to meet environmental , social and corporate governance standards . We are converting some of our properties from coal to renewable clean energy sources . The building we acquired in Cebu is LEED Gold , while our Ayala North Exchange is on its way to securing a minimum LEED certification . Ayala North Exchange has a 1000 + square meter open civic space on its retail podium .
On social impact , collectively our existing properties whose locators are top global and local companies are generating over 50,000 direct jobs for Filipinos . Most of these Filipino employees are young and in their prime age in terms contributing to the local economy .
Lastly , in terms of Corporate Governance , AREIT ’ s policies are consistent with REIT regulations and rules on public disclosures of listed companies . The independence of our property and fund management companies is clearly defined with majority of its directors being external . We do not have overlapping directors between AREIT and its management companies to ensure that all related party transactions are at arms-length and require the unanimous vote of all independent directors from both parties , keeping in mind the interest of the minority . Our management companies are also incentivised to perform for the REIT as its fee structure is percentage-based both on top line and bottom line .
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