SEC Proposes Major Changes to Expand REIT Rules in the Philippines

The Philippine Securities and Exchange Commission is moving forward with proposed changes to the country’s real estate investment trust framework, a development that could significantly reshape how property and income generating assets are structured and funded in the coming years.

According to GMA News Online, the SEC released draft amendments to the REIT implementing rules and regulations for public consultation in late November. The proposed revisions aim to broaden the scope of assets that can be included in REIT portfolios while introducing more flexibility in reinvestment timelines and ownership requirements.

If finalized, these changes could expand the role of REITs beyond traditional office, retail, and industrial assets and strengthen their position within the Philippine capital market.

Broader Asset Eligibility Under Proposed Rules

One of the most notable proposals involves expanding the definition of income generating real estate assets. Under the draft rules, REITs may be allowed to hold qualifying assets directly or indirectly through investments in special purpose vehicles created to own those assets.

The SEC is considering allowing assets linked to transportation, telecommunications, and other infrastructure related sectors to qualify under the REIT framework. These assets typically generate stable, long term cash flows but have historically fallen outside the scope of existing REIT regulations.

Industry observers note that this move could diversify the types of income streams available to REIT investors and encourage asset owners to unlock value from infrastructure adjacent properties.

More Flexible Reinvestment Timelines

The SEC is also proposing changes to the reinvestment period for REIT sponsors. Currently, sponsors are required to reinvest proceeds from REIT offerings within one year. Under the draft amendments, this period would be extended to two years.

The extension is intended to give issuers more flexibility in sourcing suitable income generating assets, particularly for large or complex projects that require longer development or acquisition timelines.

This adjustment could make REITs more attractive to developers with long term portfolios, while reducing pressure to rush asset acquisitions immediately after listing.

Adjustments to Public Ownership Requirements

Another key proposal addresses minimum public ownership levels. The SEC is considering allowing temporary dips below required public ownership thresholds when sponsors inject new assets into a REIT in exchange for shares.

It was reported that these temporary adjustments would still be subject to disclosure requirements and corrective measures. The goal is to balance flexibility for asset expansion with continued investor protection.

This change could make it easier for REITs to grow their portfolios over time without triggering technical compliance issues during asset infusions.

Implications for the Philippine Real Estate Market

If adopted, the proposed amendments could have broad implications for the real estate sector. REITs have become an important tool for capital recycling, allowing developers to monetize stabilized assets while funding new projects.

Expanded asset eligibility could encourage listings backed by infrastructure linked properties, logistics assets, or specialized facilities, potentially increasing the diversity of REIT offerings on the Philippine Stock Exchange.

For investors, the reforms may result in a wider selection of listed real estate products with varying risk and return profiles. Assets tied to long term infrastructure usage could appeal to income focused investors seeking stable yields.

At the same time, the SEC has emphasized the importance of maintaining governance standards, disclosure requirements, and investor safeguards as the framework evolves.

What Comes Next

The proposed amendments are still subject to public consultation and review. Market participants are closely watching how the final rules define eligible assets, ownership structures, and compliance requirements.

Key questions include how broadly infrastructure assets will be interpreted, how disclosure standards will be enforced, and how quickly issuers may move to take advantage of the revised framework once approved.

As regulatory changes take shape, they reflect a broader shift toward more sophisticated and flexible capital market tools supporting real estate development and investment in the Philippines.

Grid Perspective

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