What is a REIT?
A stock corporation that owns income-producing real estate assets. It's an investment instrument that provides returns to the investors derived from rental income of the underlying real estate assets.
Features
No Large Capital Outlay
Investing in REITs gives you the benefits of owning real estate asset without the need for a large capital
Management Handled by Professionals
By investing in REITs you get to own a real estate asset without the headache of actually managing one
Regular Dividend Payouts
Most REITs payout 90% of its earnings as dividends to its investors in order to enjoy incentives such as lower income tax.
Listed in the Philippine Stock Exchange
Being listed in the PSE makes it easy for investors yo buy and sell REITs and they get to enjoy information transparency and timely company disclosures.
Types of REITs
Office REITs
Gusaling ginagamit
bilang opisina
Hospitality REITs
Hotels at resorts
Infrastructure REITs
Tollgates, airports at iba pang logistics assets
Mixed o Diversified REITs
Nag-invest sa higit isang uri ng property (e.g. malls at hotels, mga opisina at warehouses)
Retail REITs
Shopping mall o retail
spaces
Healthcare REITs
Mga ospital at iba pang healthcare-related assets gaya ng laboratoryo, senior housing, etc.
Industrial REITs
Warehouses at mga manufacturing logistics at distribution center assets.
What to look for
Economy
Current and projected GDP growth expectations tend to drive decisions whether to rent more space.
Industries or Segments
Look at the demand from the industries or segments that a REIT services. Strong demand lead to higher rent prices.
Clients and Tenants
Are clients and tenants of a REIT financially stable to meet rental commitments and potentially renew leases?
Sample Data
Are clients and tenants of a REIT financially stable to meet rental commitments and potentially renew leases?
Contract
Longer contracts lend a higher level of predictability and stability
Location
Are the properties located in the areas that are expected to appreciate?
Pipeline
Check the majority owner of the REIT. Does the owner have deep and extensive pipeline of property assets that can be injected into the REIT? Stronger pipeline give investors assurance that the REIT can achieve growth.
