Longer foreign land lease to benefit REIT market

The move to extend the lease term allowed for foreign investors to 99 years is seen to benefit the country's real estate investment trust (REIT) market as it will allow the expansion and diversification of property portfolios.

- CATHERINE TALAVERA

In an email to The STAR, Santos Knight Frank director of consultancy Lovelle Taleon cited the recently approved House Bill 10755, which amends Republic Act 7652, or the Investors' Lease Act of 1993, as one measure that will positively impact the REIT market.

Taleon said that bill would extend the lease term for foreign investors to up to 99 years, allowing private land to be leased to them, with the option to sublet the property.

"This move is expected to positively impact the REIT market by enabling the expansion and diversification of property portfolios," Taleon said.

"With longer lease terms, REITs can attract more stable, long-term investments, potentially driving growth in the sector and improving overall market liquidity," she said.

Aside from House Bill 10755, the Senate also recently approved its own version of the measure through Senate Bill 2898.

Colliers Philippines director for research Joey Roi Bondoc said the approval of the measures presents tremendous opportunities for the property sector, especially for industrial and leisure segments.