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Exchange listing rules for Reits

The Philippine Stock Exchange has adopted its Listing Rules for Real Estate Investment Trusts (Reits) which took effect on October 8 2010. The Listing Rules were made in accordance with the requirement under Republic Act No 9856 (the Reit Act of 2009) that the shares of stock of a Reit must be listed pursuant to the rules of the Exchange.

A Reit is a stock corporation established under the Corporation Code principally for the purpose of owning income-generating real estate assets. Under the Listing Rules, in addition to the criteria established under the Listing and Disclosure Rules of the Exchange, a Reit must also comply with the following criteria to qualify for listing:

  • it must have a dividend policy of distributing annually at least 90% of its distributable income as dividends to its shareholders;
  • it must have at least 1,000 public shareholders, each owning at least 50 shares and who in aggregate own one-third of the outstanding capital stock;
  • it must have a minimum paid-up capital of P300 million ($6.94 million);
  • at least 75% of its property must be invested in income-generating real estate;
  • at least one-third, and in no case less than two, of its board of directors must be independent directors; and
  • it must appoint a fund manager and property manager in accordance with the law.

A Reit must also comply with the reporting and disclosure requirements under the Corporation Code, the Securities Regulation Code, the Exchange and the Reit Act.

Once listed, a Reit must comply with the continuing listing requirements of the Exchange, such as the maintenance of its status as a public company, the distribution of at least 90% of its distributable income to its investors, and the valuation of its assets by an independent valuation company. If it does not comply, the Reit could be subject to delisting.

Imelda A Manguiat

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