Robinsons Land Corp., the real estate arm of conglomerate JG Summit Holdings Inc., said over the weekend it plans to conduct a real estate investment trust offering that will include some of its office buildings next year.
RLC said in a disclosure to the stock exchange it was considering infusing “a significant number of its existing office buildings into the new REIT company” to be listed with the Philippine Stock Exchange.
RLC is one of the country’s leading office landlords with 25 office buildings offering a total net leasable area of over 600,000 square meters.
A REIT is a corporation that primarily invests in income-generating real estate such as office spaces, malls, service apartments, and even hotels, hospitals, warehouses and the likes.
Its office building division posted revenues of P4.34 billion in the first nine months, up 20 percent from the same period last year.
The company did not say how much it would raise from the planned REIT listing, but said it would “create further growth opportunities.”
RLC would become the second company to conduct an REIT offering in the country, following the successful listing of Ayala Land Inc.’s AREIT Inc. in August.
Aside from RLC, DoubleDragon Properties Corp. also announced plans to conduct an REIT offering this year. Its plan, however, could be delayed to next year.
The REIT was enacted 11 years ago, but it was only now that property developers considered REIT offering after the government eased the stringent tax and public ownership requirements for REIT listing. Jenniffer B. Austria
The Securities and Exchange Commission agreed in January to lower the required minimum public ownership for an REIT company to 33 percent from 40 percent as long as funds raised using a REIT listing would be reinvested locally within a period of one year.
The Bureau of Internal Revenue agreed to exempt from the 12-percent value added tax the transfer of property to a REIT in exchange for its shares.
REITs are required to distribute a minimum 90 percent of its distributable income as dividends annually to avail of certain tax benefits, as dividends distributed operate effectively as a tax-shield for corporate income tax.
