REIT companies expand portfolio to 2.43 million sqm

MANILA, Philippines — The country’s real estate investment trust (REIT) companies have grown their total portfolio coverage to 2.43 million square meters in just three years since the first REIT was launched in 2020, according to Leechiu Property Consultants Inc. (LPC).

“The REITs continue to grow their portfolios despite valuation compression due to the high interest rate market. For investors, however, REITs are viewed as an attractive investment alternative with its significantly higher yields than traditional real estate assets,” LPC said in its latest report.

A REIT is a company that owns, and in most cases operates, income-producing real estate.

Among the more prominent REITs in the country are AREIT, DDMP REIT, Filinvest REIT, RL Commercial REIT, MREIT, CitiCore, Vista Land’s VREIT and Premiere Island Power REIT Corp.

Capital values across Metro Manila’s commercial districts sustained their levels despite local and global headwinds throughout 2023, proving the property market’s resilience, LPC said.

Some landmark deals in 2023 include a P1-million per sqm commercial lot in Legazpi Village, Makati and another commercial lot at the center of Makati transacting at over P1.5 million per sqm.

In the Bay Area, a commercial lot traded hands at P400,000 per sqm.

“Meanwhile, Filinvest City cements itself as the main CBD in the south, posting a 15 percent year-on-year increase in transaction values. Despite these landmark deals, transaction volumes are still thin as investor outlook remains cautious on the back of the 100-basis point increase in Bangko Sentral ng Pilipinas key policy rates this year from 5.5 percent to 6.5 percent.”

“Should the anticipated interest rate cuts materialize in 2024, we may see improvement in transaction volumes,” LPC said.

The capital appreciation is also evident in prices of golf and country clubs outside Metro Manila, which showed high double to triple-digit growth in 2023. This was propelled by improved road infrastructure, LPC said.

Valley Golf and Country Club in Rizal emerged as the standout performer outside Metro Manila, growing by 173 percent, while Manila Golf takes the spotlight in Metro Manila with an 82 percent increase, the property consultant reported.