Proposed rule changes by the Securities and Exchange Commission (SEC) could allow infrastructure assets to be included in real estate investment trusts (REITs), potentially reviving REIT listings, according to Investment and Capital Corp. of the Philippines (ICCP).
ICCP president Manny Ocampo said the amendments could pave the way for billion-peso REIT offerings from toll road operators, water utilities, fiber optic networks, cell towers, and data center developers, once these assets are prepared for public listing.
He said the timing is favorable as it aligns with a possible easing of interest rates. Lower rates would reduce the need for issuers to offer high dividend yields, making REIT listings more attractive. “REITs are ultimately a dividend-driven investment,” Ocampo said.
The Philippine REIT market grew from 2020 to 2022 but has since stalled. The last listing was Premier Island Power REIT Corp. in December 2022. Ocampo noted that lower interest rates during that period helped drive issuances.
He added that the Bangko Sentral ng Pilipinas’ policy direction could be a key factor, with possible rate cuts through 2026 opening a window for new infrastructure-backed REITs. However, he cautioned that actual listings will still depend on issuer readiness, asset valuations, and overall market conditions.
In November, the SEC proposed amendments to give REIT sponsors more flexibility in reinvesting listing proceeds and to relax minimum public ownership requirements, among other changes.
SEC Chairman Francis E. Lim said the reforms aim to keep the REIT framework responsive to market needs and help the sector raise more capital to support economic growth.
The proposed rules would broaden the definition of income-generating real estate to include assets held directly or indirectly through special purpose vehicles, as well as properties with regular and predictable income streams. These may cover transportation, ICT, and energy infrastructure, as well as parking facilities, buildings, malls, warehouses, machinery, and certain real property rights.
