Posted on 09:16 PM, October 04, 2010 [ BusinessWorld Online ]
THE SECURITIES and Exchange Commission (SEC) approved listing rules for real estate investment trust (REIT) late last month without heeding the Finance department’s proposal to widen public ownership of REITs.
The rules, which will take effect on Oct. 8, take the new investment scheme one step closer to implementation. The government has yet to approve tax rules.
Under the rules, a REIT company is required to have 1,000 shareholders holding 50 shares each and a minimum P300 million in capital. “The same REIT [firm] shall not have the same property valuer for more than three consecutive years,” the rules stated.
There is a need for an “external legal counsel’s opinion on whether the applicant company complies with the requirements of the REIT Act.”
But the public float for listed REIT firms was still pegged by the Philippine Stock Exchange and the SEC at 33.3%.
The Finance department wants REIT companies to sell half of their shares to the public.
Early last month, the PSE said it was willing to arrive at a compromise with the government to approve the tax rules on REIT.
“The important thing is the government’s tax rules ... But [the approved rules] indicate that the REIT [law’s implementation] is near,” Juan Carlos D. Garcia, investment analyst at 2Trade Asia, said in a phone interview. “That is the problem. The government and the PSE should have a common ground,” he said.
Property giants have already expressed interest to acquire funds through the new investment vehicle. SM Prime Holdings, Inc. is looking to raise about $500 million through a REIT. Last week, property giant Ayala Land, Inc. filed papers for the creation of AyalaLand Commercial REIT, Inc., which will serve as the vehicle for its $300-million foray into REITs. -- Neil Jerome C. Morales
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