MANULIFE PHILIPPINES has rolled out a new investment platform which allows Filipino clients to invest in real property across Asia-Pacific, at a time when local real estate investment tools remain scarce.
The insurer said the Asia Pacific Property Income (APPI) Fund pools placements from investors — mainly in the US dollar — which are then parked under real estate investment trusts (REITs) across the region.
REITs work like mutual funds by pooling individual investments, but are specifically meant to purchase shares in properties like malls, hotels, warehouses, highways and office buildings and generate income from rental fees.
Ryan Charland, president and chief executive officer of Manulife Philippines, said investing through the APPI allows clients to diversify their portfolios.
“It is also a very good instrument to hedge against inflation,” Mr. Charland was quoted as saying in a statement sent on Friday.
The investment fund makes bets in REITs in Singapore, Hong Kong, Australia, Thailand, and Malaysia, while profits can be reaped twice a year.
The APPI is a feeder fund tucked into the Asia Pacific REIT Fund of Funds run by the firm’s subsidiary, Manulife Asset Management and Trust Corp. It can also be accessed via Manulife’s variable insurance products.
In the Philippines, a law supporting REITs has been in place since 2009 but authorities are yet to unlock its potential as an investment tool amid uncertainties on taxation and regulation. Property developers have been lukewarm to the rules so far due to extra costs from value-added tax, and since they would have little control over REITs due to a 40-67% public float under the current implementing rules.
Revised guidelines are being finalized by the Securities and Exchange Commission (SEC) and may be out by June, amid assurances sought by Finance Secretary Carlos G. Dominguez III that gains from the REITs will be reinvested in the Philippines.
The 12% tax on transfer of real properties has been removed by the Tax Reform for Acceleration and Inclusion Act that took effect a year ago. Meanwhile, the SEC said it is favoring a lower 33% minimum public ownership level. — Melissa Luz T. Lopez