PROPERTY companies which are packaging their office buildings, residential condominiums and others into REITs (real estate investment trust) have made a beeline in the listing department of the Philippine Stock Exchange, starting with the highly successful offering of Ayala Reit ($:AREIT) last year.
The latest to join the selling bandwagon is Robinsons Land Corp. ($:RLC) with 3.6 billion shares at P6.45/share, to raise close to P23.5 billion.
$:RCR is the fourth and the largest REIT listing at the local bourse so far, breaking records among listed REITs.
RCR Chairman Frederick Go was happy, describing the first-day listing as a "success."
"The success of our IPO is an affirmation of RCR as an attractive investment and of REITs as a new facet of the Philippines' financial landscape," Go said at the listing ceremony of $:RCR.
While Go and the Gokongwei family are happy, retail traders and investors cannot readily share the joy because of the tepid showing of $:RCR's price action on the first three days.
With a listed IPO price of P6.45, the stock move up only by one centavo on the first day, with a huge red elephant bar.
Only on the third day, Sept. 16, that $:RCR showed a green candlestick, and even that has a long downward wick from6.49 to 6.46, or just a 0.02 centavos or 0.31% increase in price.
For buyers who are eyeing the long run, it is reassuring to know that RL Commercial REIT Inc. is reportedly the most geographically diverse among the REITs, with over 94 percent of its initial portfolio spread in the business districts of Ortigas, Bonifacio Global City, Makati, Mandaluyong, Quezon City, Metro Cebu, Metro Davao, Naga City and Tarlac City.
RCR's initial portfolio spans 425,315 square meters of gross leasable area (GLA), which makes its asset size the largest.Its GLA is expected to grow through the years, with Robinsons Land intending to infuse one or two assets every year into its REIT unit.
One good thing for REIT investors is the provision in the new REIT Law that REIT companies are required to
spend all of the proceeds within one year from the IPO close on property development-related activities inside the Philippines.
The law -- REIT Act of 2009 --also mandates REITs to distribute as dividends 90 percent of their net income to stockholders.This is a form of guaranteed returns or income to investors.
In contrast, dividends from stocks or developers are not guaranteed and subject to the discretion of the board of directors as to whether these dividends will be given at all, how much will be paid and when.
In the case of property developer Italpinas Development Corp. ($:IDC) the promised stock dividends might come before the end of the 5th wave of the COVID-19 pandemic, in the time of the Omega variant.
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