Ayala Land files first real estate investment trust listing
MANILA, Philippines — Property developer Ayala Land Inc. is reportedly eyeing to raise $500 million as it prepares to participate in the real estate investment trust (REIT) industry in the Philippines.
According to a Wednesday report by The STAR, Ayala Land filed a REIT company registration with the Securities and Exchange Commission.
REIT is deemed a very important vehicle to generate more investments especially for real estate companies but was stalled by tight taxation framework.
Companies that own and operate income-generating real estate assets are considered REIT companies. These companies include offices, apartment buildings, hotels, warehouses, shopping centers and highways.
It provides investors regular income and long-term capital appreciation like mutual funds.
In December 2009, Congress passed the REIT Act but none of the major property developers participated with their prospective offerings amid issues on ownership and taxation on asset transfers.
For instance, the government subjected the transfer of assets into REITs to taxation and slapped a 12% rate on additional income generated.
It also set the minimum public ownership of such trusts at 40% for the first two years of their listing and 67% thereafter.
The Aquino government had imposed these stringent REIT rules to prevent entities from taking advantage of the tax incentives.
Incentives under the REIT Act were expected to translate to losses of P10 billion for the government, according to the previous administration. — with reports from The STAR/Iris Gonzales
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