INTERVIEW: APREA
Emerging markets lead REIT in Asia Pacific: APREA The Philippines is set to become the REIT IPO hotspot in the region this 2021.
R
eal estate investment trust (REITs) in the AsiaPacific is projected to grow in both emerging and developed markets. As more investors grow to become acquainted with REITs, a number of new REIT classes have opened up, a promising move for REITs to improve in the coming years. The majority of the REIT listings seen this year and over the past year have taken place in the emerging markets of India, Philippines, Thailand, said APREA CEO Sigrid Zialcita. This is in addition to China having announced that they have approved their pilot REIT regime. “What we’ve seen in China is that they have actually been inducing a lot of the players to submit their assets for a REIT listing. In May 2021, the China Securities Regulatory Commission or CSRC, approved the registration of nine REITs, and this will essentially channel investors’ money into projects,” she said. Zialcita said that in China, the focus of the REITs is on infrastructure projects. However, they are also seeing positive developments in fast growing markets. The next phase for REIT APREA anticipates that the next phase of growth, when it comes to the asset class, is that it will be driven by the expansion and adoption of the REIT framework in the region’s fast-growing markets – not only this year, but also into the decade. “In the developed markets, there is also continued expansion of the REIT sector in some of places such as Hong Kong. We worked with the Securities and Futures Commission to go through the REIT code that they have and made some enhancements. There are a few companies that have lined up plans for a REIT listing in Hong Kong,” she said. “Compared to Singapore, Japan, and Australia, there are only a few sectors in Hong Kong to get into REITs,” she added. In emerging markets such as the Philippines, interest in REITs have picked up pace among top developers the past year. In the February 2021 GPR APREA Indices, it was reported that the Philippines is set to become the REIT IPO hotspot in the Asia-Pacific region this year. Led by the debut of Ayala Land REIT, upcoming property listings include SM Prime, Robinsons Land, and Megaworld Corporation. “A change in regulations in the Philippines has necessitated or fast-tracked the implementation of the 24
REAL ESTATE ASIA | Q1 2021
APREA CEO Sigrid Zialcita
In the Philippines, the BPO sector remains the primary support or pillar of economic activity, which fast-tracked the implementation of REIT
REIT framework leading it to become a listing hotspot. By having this REIT vehicle, developers can free up some of the investments locked in assets and recycle the capital into something else,” she said. Mainly led by the office sector, interest in REITs in the Philippines is being stabilized by one of its largest occupiers of commercial space: the business process outsourcing (BPO) sector. “Looking at the Philippines today, the BPO sector remains the primary support or pillar of economic activity. If we look at companies that have sponsored REITs and those planning to put their assets into REITs, these are on the office side. The Philippines is lucky and fortunate to have many of these players own these assets that allow the BPO sector to thrive in the country,” she added. A call to invest in REITs In terms of having to educate players about REITs and having it as an investment option, Zialcita said that there is still a lack of information in terms of how REITs are performing. Investors tend to invest directly into real estate, but only those deeply interested in the industry can tell the difference between this and REITs.
