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PSE Reit Listing Rules

A Real Estate Investment Trust (REIT) is a stock corporation that owns income-generating real estate like office buildings, shopping centers, and hotels. REITs provide benefits to issuers such as gaining access to capital through stock sales, substantial tax benefits like deducting dividends from income taxes, and enhanced valuation of assets. To list as a REIT, an issuer must meet requirements like having a minimum paid-up capital of 300 million pesos and complying with disclosure rules.

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129 views2 pages

PSE Reit Listing Rules

A Real Estate Investment Trust (REIT) is a stock corporation that owns income-generating real estate like office buildings, shopping centers, and hotels. REITs provide benefits to issuers such as gaining access to capital through stock sales, substantial tax benefits like deducting dividends from income taxes, and enhanced valuation of assets. To list as a REIT, an issuer must meet requirements like having a minimum paid-up capital of 300 million pesos and complying with disclosure rules.

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REIT 101 for Issuers

Real Estate Investment Trust

What is a REIT?

A Real Estate Investment Trust (REIT) is a stock corporation created for the purpose of owning
income-generating real estate such as office buildings, residential condominiums, shopping
centers, hotels, warehouses, hospitals, airports and tollways. The revenues of REITs principally
come from rental income, toll fees, user’s fees and the like.

Benefits of Listing as a REIT

1. Gain access to ready capital with your existing property.


By transferring assets into a REIT and selling the REIT’s shares to investors, developers and
property owners will be able to gain access to ready capital and generate funding that can
be used in additional property developments and expansion projects, especially in growth
areas such as the provinces.

2. Substantial Tax Benefits.


Under the REIT Act, a REIT is allowed to deduct its dividends paid from its gross income.
Given the required minimum 90% annual dividend declaration of REITs, this considerably
lowers the income tax payable of REITs. Moreover, REITs enjoy a lower creditable
withholding tax rate of one percent (1%) for income payments.

Upon initial public offering (“IPO”), a REIT is exempt from IPO tax.

Under current tax laws, the transfer of property to a REIT under a Tax-Free Exchange is
exempt from value-added tax. In addition, a REIT enjoys a 50% discount on documentary
stamp tax on the transfer of real property to the REIT.

3. Enhanced valuation for the REIT.


The formation of the company's share price in the market creates a reference to the value
of the company in merger, acquisition or secondary offering activities.

4. Increased transparency generates marketing advantages and encourages good


housekeeping for the REITs.

Disclosure obligations to the investing public encourage a listed REIT to plan responsibly and
manage cycles in the property market. The added transparency also enables REITs to attract
both local and global investors.
General REIT Listing Requirements

1. Stock corporation with a minimum paid-up capital of Php 300 million


2. 1/3 Minimum Public Ownership
3. At least 1/3 of the board of directors of a REIT must be independent directors, which in no
case shall be less than two (2)
4. A REIT shall comply with the reportorial and disclosure requirements prescribed by the
Revised Corporation Code, the Securities Regulation Code, the PSE Listing and Disclosure
Rules, and the REIT Act of 2009 and its IRR, as may be amended
5. Subject to general listing requirements (e.g., 3-year track record of profitable operations)

To schedule an in-depth session on REIT listing, you may email the PSE Marketing Services
Department at reitlisting@pse.com.ph to book an appointment or click on the link
https://www.pse.com.ph/resource/memos/2020/CN_2020-0005.pdf for further details on
listing.

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