Real Estate Investment Trust: A good source of Income?

Manila, Philippines – Ayala established the first Real Estate Investment Trust in the Philippines on August 13, 2020, which is known up to today as AREIT. For that year, REITs during that time were speculative, with different opinions both positive and negative feedback from investors, entities, traders, and the public. Some opinions from the public said that it is a suitable alternative to savings accounts as REITs produce quarterly dividends which are way higher compared to savings accounts in banks. However, during the listing date, AREIT faced a whopping decline of 7.78% which made the entity doubted and feared, and gaining bad market sentiment.

Up to this date, a lot of REITS have been listed on the Philippine Stock Exchange and these include FILREIT, DDMPREIT, RCR, MREIT, CREIT, and the upcoming REIT from the Villar Clan, VREIT. A lot of prominent clans and powerful families are establishing REITs to diversify their portfolio and at the same time, to engage in these businesses. Further to that, real estate investment involve the properties they are managing. Some are in the growth stage, some are established already. These things will depend on the management of each REIT. But the real essence of it is what? Is it the dividends? The price appreciation? This will depend on the perspective of the entity.

According to BusinessWorld, there is outstanding market interest in REITs seen to continue in 2022 and throughout the years. Since the economy is recovering and bouncing back from the pandemic, some investors are encouraged to invest in REIT as they beats inflation in the country and at the same time, is a source of cash flow. REIT companies are aggressive in terms of capital infusion, expansion, renewal of contracts to their clients, and growth. Furthermore, if REITs aggressively get the market spotlight, this will have a domino effect on the real estate industry as it will bounce back, and the growth remains. In addition to that, the dividend yield rate of the industry is growing yearly based on AREIT’s forecast and other REITs. 

In terms of renewable energy REITs, CREIT  known as Citicore REIT is one of the top picks of local and foreign investors as CREIT is known for its focus on leasing land to its affiliated companies that are engaged in renewable energy businesses. With its tagline “Community-focused renewable energy and water solutions company that responsibly harnesses nature’s resources to fuel long-term value and empower Filipino communities,” Furthermore, Citicore REIT focuses on long-term growth, as well as maintaining sustainability throughout the years. In addition to that, CREIT is known for giving higher dividend yields compared to other REITs with a whopping 7% as forecast in the year 2022. During the 1Q of 2022, CREIT issued 0.044 PHP per share to each common shareholder with a distributable income amounted to 285.09M PHP. 

dividends by Real Estate Investment

Investing with these REITs is ideally for investors/entities who are engaged in CASHFLOW. According to the well-known author Mr. Robert Kiyosaki, cash flow is something that is produced by an ASSET that produces money or income-generating. An asset that produces cash to an entity without its presence of it. Therefore, these include Real Estate Properties, Stocks, Bonds, REITs, and so on. Furthermore, REIT is a suitable alternative for your savings as it beats inflation. Year by year, basic commodities are increasing, utility bills, gas, food, medicine, and so on due to inflation. With that, if you have excess money in your bank account that produces 0.25 – 1%, is it worth it? These things will depend on the perspective of the owner of the money. Is real estate investment a suitable alternative and a source of funds with a rate of 4% – 7%, and with the upcoming VREIT which is forecasted to produce 8.24% of dividend yield? Of course, these things will depend on YOU!

There are various ways to invest in these real estate investments. Some platforms and banks are offering these products to their customers. To begin with, there are various online platforms such as COL Financial, Abacus Securities, ChinaBank Securities, First Metro Securities, and so on. In addition, some banks are offering IPO before the listing date and these banks include BDO, China Bank, BPI, PNB, and so on. Thus, there are a lot of opportunities in the market, and if you’re into DIVIDENDS, REITs are good alternatives. With its high yield of dividends, it is very attractive to investors and entities who are into CASHFLOWS.

Why REITs? It’s not mainly about dividends, but price appreciation as well. For example, AREIT, during the listing date of AREIT, it is publicly listed at 27 PHP per share and last January 2022 it  broke the resistance level of 50 and maintained its level to 50-52 per share. Let me ask you? Is it a good investment? Of course, price appreciation and dividends. Furthermore, when it comes to AYALA management, some say that we’re in good hands since AYALA is a well-known and prominent family that controls different entities locally and internationally. These things will differ from the perspective of different investors, like with AREIT, a more growth company. And if you’re into much higher yield, try to consider CREIT, DDMPR, and the upcoming VREIT.

REITs are more becoming popular these days due to the interest of the market, both local and foreign. In addition, the rise of REITs gave more chances for Filipinos to learn about investing in general. This opens up a chance for Filipinos to become more financially literate and be part of the growth of these well-known companies. For different entities and institutions, this is a chance to be part of it, it beats the inflation, and the stock price of each real estate investment appreciates or depreciates but as long as it produces good cash inflow, is it good or bad? This will depend on YOU!

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