Villar-led VistaREIT makes bland debut amid market turbulence

MANILA, Philippines — VistaREIT made a lackluster stock market debut on Wednesday after finishing the trading day flat, as fears over rising inflation and rate hikes meant to temper consumer price spikes rattle equities markets at home and abroad.

The real estate investment trust (REIT) company of the Villar family saw its share price dip to an intraday low of 6.5% before cutting those losses and ending flat at P1.75 per share.

VistaREIT’s nevertheless outperformed the main index, which lost 2.4% to close at 6.319.42 — its weakest finish so far this year.

Sought for comment, Luis Limlingan, head of sales at local brokerage Regina Capital, observed that the PSEi's sluggish performance affected VistaREIT's performance.

"VREIT had a lukewarm reception during its listing and would have finished much higher if not weighed by market sentiment as a whole, with the PSEi already drifting towards oversold territory,” Limlingan said in a market commentary.

“Investors bought up the shares, as the company aims to "maintain high occupancy rates and quality tenants with particular focus on those offering essential goods and/or services," he added/

Weeks before listing, VistaREIT already cut its offer price by 30% and trimmed its offer size to the public to 2.75 billion shares. The Villar-led REIT's portfolio is centered on its malls unlike previous offerings that spotlighted office spaces and residential areas.

Despite this, Limlingan noted that VistaREIT yields are expected to be one of the highest, with more than 8% this year and around 9% in 2023. Trader Aniceto Pangan explained that rising interest rates, with the Bangko Sentral ng Pilipinas set to tighten further, will have an impact on REITs.

"A rate hike has an effect on REIT. But as long as the rate is lower then it's still attractive to invest on the REIT as long as the yield would be sustained or get better," Pangan said.

"Any rate hike will definitely lower the liquidity in the surrounding so as to contain inflationary pressures but at same time will slow down the economic growth," he added.

April Tan, head of research at COL Financial, said the rising inflation and high-interest rates are "hurting sentiment for REITs, not just VREIT but all REITs."