REIT: The new stock on the block

After waiting years for the right regulations to be put in place, the country’s top property developers were finally ready to launch their real estate investment trust offerings only to have the party crashed by COVID-19 which ignited so much volatility in the local stock market.

However, despite the economic downturn, the office leasing business has proven to be resilient and “pandemic proof” so property firms designed their REITs to have mostly pure office portfolios and market investors have welcomed them with enthusiasm.

A real estate investment trust (REIT) is a stock corporation put up to of own income-generating real estate assets with regular earnings from rent and usage fees such as apartment or office buildings, medical facilities, hotels and resorts, highways, warehouses, shopping centers, railroads, among others.

For property companies, transferring these assets into a REIT allows them to raise fresh and cheaper funds that can be used to finance acquisitions, development, and expansion projects without losing majority control over these assets.