The Securities and Exchange Commission (SEC) has revised the rules for Real Estate Investment Trusts (REITs) to allow a wider range of income-generating assets, toll roads and airports, to qualify for public offerings.
It said the new framework expands the definition of income-generating real estate to include properties with recurring and predictable cash inflows. Beyond traditional leases, REITs can now include assets that generate passive income from toll fees, user fees, ticket sales, parking fees and storage fees.
The expanded scope covers railways, air navigation facilities, ports, information and communications technology infrastructure, energy assets, data centers, and warehouses.
SEC chairman Francisco Lim said this signals the commission’s priority to deepen the capital market and provide more wealth-creation opportunities for Filipinos. Under the revised rules, REITs may own these assets directly or indirectly through unlisted special purpose vehicles. For indirect ownership, the REIT should hold at least a two-thirds in the entity.
The SEC also extended the reinvestment period for sponsors or promoters to 2 years from the date of receipt of proceeds, doubling the previous 1-year window. This applies to funds raised from the sale of REIT shares or the transfer of real estate to the trust.
