The Philippines competes against Singapore to lure REIT listings

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SINGAPORE (Jan 21): Singapore’s dominant position as a real estate investment trust listing hub in Asia is being eyed by a new contender: the Philippines.

The Philippines Securities and Exchange Commission recently eased tax and ownership rules in an effort to lure REIT listings by property developers in the country. Ayala Land Inc is planning to raise US$500 million once the rules are amended, which could be the first REIT listing in the country. A deal of this size would make it one of the five biggest initial public offerings in the Philippines on record, according to data compiled by Bloomberg.

Singapore scored the most REIT IPOs in Asia excluding Japan last year, with the trusts raising some US$2.1 billion. The Singapore exchange topped others in the region in terms of money raised by REIT listings for five of the past 10 years. Investors hunting for yield in a falling interest rate environment also led to REITs listed in the city-state raising additional funds at a record pace last year.

A Win for the Lion City

There is no doubt that Singapore is the preferred listing destination for global REITs, as the only exchange attracting foreign listings in recent years. Since 2017, it has hosted the IPOs of Cromwell European Real Estate Investment Trust, ARA US Hospitality Trust and Eagle Hospitality Trust from Europe and the U.S. The favourable tax regime coupled with a well-tested judicial system in Singapore make it an ideal listing venue. 

Australia last saw a listing from a foreign REIT more than a decade ago. Hong Kong, while being the world’s top listing venue last year, saw its first REIT IPO in six years with China Merchants Commercial Real Estate Investment Trust’s debut in December.

There is quite some catching up to do for the Philippines in the REIT space, given there are currently 35 such trusts listed in Singapore, with a combined market capitalization of US$101.5 billion. India, which has seen a surge in REIT listings over the last three years, could be a bigger threat.

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