Property developers should consider diversifying their industrial assets into real estate investment trusts (REITs) driven by the projected growth of the industrial market.
In its latest market intelligence, Colliers Philippines said it sees the industrial sector thriving further along with the growth of e-commerce and completion of key infrastructure projects across the country.
“In our opinion, developers can better capture opportunities by modernizing logistics facilities,”Colliers said.
It added that developers should refurbish their warehouses to meet the demands of tenants and ensure the smooth and cost-efficient system of transferring goods from logistics facilities to markets and households.
“We also encourage investors to consider diversifying their industrial assets into REITs to access a cheaper source of capital in upgrading properties,”the property services firm said.
Colliers cited the recent P3.97 billion deal between DoubleDragon Properties Corp. and its industrial leasing subsidiary, Central Hub and Jollibee Foods Corp., as they plan to launch the first industrial REIT in the country.
“This project should signal the start of a more diversified REIT market in the Philippines,” Colliers said.
The property services firm emphasized the potential of REITs to boost the real estate sector’s growth.
“In our view, the launch of REITs in the Philippines can help boost economic performance and put the country’s real estate sector at par with neighboring Asian countries, which have more mature capital markets,” Colliers said.
At present,there are two REITs listed on the Philippine Stock Exchange (PSE) particularly AREIT Inc. of Ayala Group and DDMP REIT Inc. of DoubleDragon Properties Corp.
Gotianun-led Filinvest Land Inc. (FLI) is also set to join the REIT bandwagon as Filinvest REIT Corp (FILREIT), formerly Cyberzone Properties Inc. received the green light from the PSE.
Several more developers have also expressed interest in launching REITs such as Megaworld Corp., Robinsons Land Corp.