THE Securities and Exchange Commission (SEC) has revised the rules governing real estate investment trusts (REITs), a move it said would open more opportunities to participate in the capital market.
Issued on Jan. 8, SEC Memorandum Circular 1, Series of 2026, updated the 2020 implementing rules of the REIT Act of 2009.
“The memorandum circular broadens the list of ‘REIT-able’ income-generating assets, extends the reinvestment period for a sponsor/promoter of a REIT, and expands the list of public shareholders, among others,” the regulator said in a Facebook post.
The definition of “income-generating real estate,” in particular, was expanded to include assets such as toll roads, airports and air navigation facilities, ports, railways, data centers, malls, warehouses, parking facilities, and energy and information and communications technology infrastructure, etc.
The revised rules permit REITs to hold properties directly or indirectly through unlisted special purpose vehicles (SPVs) and incorporated joint ventures, aligning with international best practices.
Sponsors and promoters now have two years to reinvest proceeds from REIT share sales or property disposals, up from one year, providing greater flexibility in financing and growth strategies.
Dividend requirements have been clarified: SPVs and joint ventures must distribute at least 90 percent of their income to the REIT before the latter declares dividends, safeguarding investor returns.
The new guidelines also refine the definition of public shareholders, excluding individuals or entities with substantial influence, including sponsors, promoters, directors, principal officers, and immediate family members sharing a household, ensuring genuine democratization of ownership.
SEC Chairman Francis Lim said the revisions aimed to deepen the capital market and broaden participation in real estate investment.
“By establishing a more robust framework for the REIT market, we are helping more Filipinos benefit from long-term wealth creation,” he said.
Market analysts expect the updated rules to stimulate REIT listings, attract institutional and retail investors, and support the growth of infrastructure and commercial property sectors in the Philippines.
