CENTURY Properties Group, Inc. (CPG) said it is “very interested” to launch real estate investment trusts (REITs) once the government finalizes its rules on the real estate investment platform.
CPG President and Chief Executive Officer Jose Marco R. Antonio told reporters Friday the listed property developer is eyeing its office leasing portfolio to register for REITs once the plan is ripe.
“We’re very interested. I think it’s been a long-time coming for the Philippines… For us, as we’re growing our office portfolio, the REITs would be a great way to raise capital,” he said.
“We would participate once we are able to comply with the minimums and when we think there is a substantial or an adequate size to be able to have a REIT for CPG. If ever, it would definitely be more concentrated into office developments,” he added.
CPG’s leasing revenues as of the nine months of 2019 stood at P404.07 million, up 41.67% from the same period a year ago. CPG’s office assets are classified under this business segment, which is also comprised of Century City Mall in Makati, 160 medical suites in Centuria Medical Makati and the Pacific Star Low Rise Building where it has 50% ownership, among others.
“We look at the REITs as a long-term fund-raising tool and capital markets initiative that would allow us to actually accelerate further our expansion plans for commercial leasing assets,” Mr. Antonio said.
The government is targeting to finalize its guidelines on issuing REITs within the year, 11 years after Republic Act No. 9856 or the REIT Act was approved in 2009.
Based on the last draft rules that the Securities and Exchange Commission released in October, the proposal is to reduce the minimum public ownership for REITs to 33% from 40% and to require all income generated from REITs to be reinvested onshore.
Aside from CPG, Ayala Land, Inc. also said in December it wants to make its maiden REIT offering in 2020 for its prime Makati office assets.
CPG has set its capital spending at P30 billion until 2022 to finance its expansion plans. Earnings of the firm in the nine months to September rose 81% to P1.2 billion as revenues jumped 36% to P9.8 billion.
Shares in the company shed 2 centavos or 3.70% to P0.56 apiece on Friday. — Denise A. Valdez