The Philippine Securities and Exchange Commission issued revised rules for real estate investment trusts (REITs) that expand what can qualify as income-generating real estate, permit wider use of unlisted special purpose vehicles (SPVs) and incorporated joint ventures (JVs), and adjust reinvestment, dividend distribution and public shareholder provisions under the REIT Act. The amendments allow a REIT to own income-generating real estate directly or indirectly through an unlisted SPV primarily constituted to hold real estate, provided the SPV is owned by the REIT by at least two-thirds of its outstanding and voting capital stock, including through incorporated JVs. “Income-generating real estate” is clarified to include assets with recurring and predictable cash inflows beyond leases, including passive income such as toll fees, user fees, ticket sales, parking fees and storage fees, covering infrastructure assets (for example toll roads, railways, airports, ports, information and communications technology infrastructure, energy infrastructure and data centers) and other property types and real rights. The sponsor or promoter reinvestment period is extended to two years from receipt of proceeds from selling REIT shares or selling income-generating real estate to the REIT, with reinvestment permitted via equity investments, loans, debt instruments or repayment of related debt for domestic real estate or infrastructure projects. Where a REIT invests through an unlisted SPV and/or incorporated JV, that vehicle must distribute at least 90 percent of its distributable income to the REIT (and other shareholders, if any) before the REIT declares dividends, and non-compliance is treated as a breach of the REIT’s own 90 percent payout obligation. The revised guidelines also refine the definition of “public shareholders”, excluding sponsors or promoters, related corporations and certain insiders, and treat “substantial influence” as a disqualifier, including a 10 percent ownership threshold and circumstances where influence may exist below 10 percent.
Philippine Securities and Exchange Commission 2026-01-08
Philippine Securities and Exchange Commission revises REIT rules to broaden eligible assets and allow SPV and joint venture structures
The Philippine Securities and Exchange Commission revised REIT rules, expanding income-generating real estate definitions, allowing broader use of unlisted SPVs and JVs, and adjusting reinvestment, dividend distribution, and public shareholder provisions. Key changes include a two-year reinvestment period for sponsors, a 90 percent income distribution requirement for SPVs and JVs, and refined definitions of public shareholders and substantial influence.