How to Invest REITs in the Philippines in 2021

Want to grow your investment portfolio with real estate investment trusts? If you do, I’m sure you heard about REITs. Today, we discuss about REITS and how to make money investing in REITs in the Philippines in 2021.

With the news of a bill passing in Congress which allows foreign entities to open companies here in the Philippines and own it 100% for certain sectors, it is a welcome time to explore real estate once more.

how to invest reits in the philippines

What are REITs?

REITs refer to Real Estate Investment Trusts. They are companies that own and operate real estate properties to generate income. REITs include hotels, data centers, cell towers, hospitals, commercial areas, office spaces, shopping centers, apartments, warehouses and other buildings. Investors prefer REITs because of diversification, lower risk and higher returns.

How do REITs Make Money?

It is actually very simple and easy: rent income. Almost all REITs would simply lease out and collect rent on the various properties that they own. The company then generates income out of this and they then pay back investors through dividends.

The best part is — REITs are required to pay out at least 90% of their taxable income to their investors. Most even pay out 100%!

Top 5 Reasons Why You Should Invest in REITS?

1. Higher Earnings Potential

Real Estate Investments Trusts are historically one of the best-performing asset classes in the market today. As we know, real properties grow in value over time and don’t depreciate in value easily, REITs also produce more income through regular rental revenue. They also have the ability to generate dividends.

2. You Don’t Have to Spend Huge Money

If you want to take advantage of the growing performance of real estate business without owning an expensive real property, invest in REITs. Let’s face it, buying real property is very expensive. And more often, you have to pay a reservation fee and down payment.

3. Zero Contract and Obligation

When buying a property, you have to take out a loan with a contract, scout the area, and make sure it is a good neighborhood, pay mortgages, parking spaces, etc. You can avoid those stressful contracts and obligations by investing in REITs instead of buying a property especially if your savings are not yet enough to start such risky long-term contract.

4. Portfolio Diversification

Some REITs are already diversified, meaning, they are invested in different real estate properties such as shopping mall units, commercial buildings, office spaces, hotels and the like. If you want to allocate a part of your portfolio with real estate business, REITs are excellent option. Diversification is one of the most effective strategies of investing.

5. Lower Risk

Because you are not locked in a contract, you can avoid a lot of risks. When you diversify your portfolio with REITs, you can also minimize risk by extending your earning potential to different asset classes and allocation.

How to Invest REITs in the Philippines?

  1. Open a trading platform that offers REITs
  2. Look for well-established REIT companies
  3. Invest in REIT via PSE EASy
  4. Trade REIT using an online broker
  5. Choose the best performing REITs

When choosing your REIT investment, make sure you invest with companies with great properties and tenants. It can also help if you monitor the best performing REITs in the market.

If you are a beginner, leave the research and hard work to the experts. You can invest in REIT ETFs. REIT ETFs are composed of several REITs already. Investing in them will also offer the most diversification. Hence, a great advantage for you.

There are two REITs in the Philippines that you can start trading in the Philippine Stock Exchange. They are Ayala Land REIT (AREIT) and DoubleDragon REIT (DDMPR).

That being said, investors can buy shares using any accredited online broker by the Philippine Stock Exchange like BDO Securities, First Metro Securities, and COL Financial.

Best Performing REITs You Can Invest Right Now

CodeREIT / REIT ETF
AREITAyala Land REIT
DDMPRDoubleDragon Properties REIT
RWRSPDR Dow Jones REIT ETF
USRTiShares Core U.S. REIT ETF
IYRDJ US Real Estate iShares
AOX.DEAlstria Office REIT AG
AMTAmerican Tower Corp.
DLRDigital Realty
CCICrown Castle International
SBACSBA Communications Corp.

Leave your comments below if you have any question about how to invest REIT in the Philippines or you want any help regarding investing.

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Disclaimer: This article is for information purposes only and should not be considered as a professional advice. All investments have risks. Risk only the money you can handle to lose. Always do your own research before investing any asset.

About Fehl Dungo

Founder of DailyPik, entrepreneur, and tech investor. I have a Degree in Accountancy and a background in Finance. I analyze stocks everyday. Copy my trades on eToro Connect with me on Facebook

15 thoughts on “How to Invest REITs in the Philippines in 2021”

  1. hi Ms. Fehl, i got interested in REITs, my question is, if I use eTORO as my platform magkano po or ilang percent ung deduction nila on every transaction compare to First Metro Go? thanks in advance.

    Reply
    • Hi Elle 🙂 There is no charge/fee as long as you use X1 leverage for BUY position. My strategy for REITs on eToro is Buy and Hold strategy using X1 leverage. I lock in profit and earn dividends without paying fees 🙂

      You will pay fees only if you use X2 leverage and higher and when you short the stock

      Reply
  2. Hi Ms Fehl,

    Please feature a post on how to buy REIT in the Philippines. Especially that Ayala Inc is about to launch. Thank you

    Reply
  3. The title of this article is ‘How to Invest REITs in the Philippines in 2020’ – and yet the ‘Best Performing REITs’ section contains NOTHING related to the Philippines. Also, the link to eToro is questionable as it seems that ~50% of the people who post reviews are upset and dissatisfied. I strongly suggest you focus on identifying Philippine-specific REIT opportunities.

    Reply
    • Hi 🙂 Thanks for the feedback. When I wrote this post, there was no specific REIT product on the PSE yet. But recently the first ever REIT IPO was approved by the PSE. I’ll be adding it to the post. eToro is a legit broker. There are numerous bad reviews about eToro, there are also numerous excellent reviews about it. It’s always up to the trader or user. From personal experience, I like the platform for its user-friendly interface. And there are many REITs available there 🙂 Cheers!

      Reply

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