REAL estate investment trusts (REITs), backed by long-term lease agreements and tangible assets, are showing their resilience as they lead the Philippine property sector back to recovery following the steep market declines triggered by the US tariff announcements last April.
Leechiu Property Consultants director Tam Angel said REITs were outperforming other sectors and offering a buffer against market volatility.
He noted that property stocks had also made a strong comeback since tariff shocks in April a few days after US President Donald Trump’s “Liberation Day” announcement.
He recalled that the Philippine Stock Exchange index (PSEi) had plunged 14 percent on April 7, while property stocks fell by as much as 20 percent.
“The property sector in the stock market was down 20 percent last quarter. And then it was actually down about 3 percent that singular day,” Angel noted.
The PSEi has since regained ground, inching up 1.6 percent year on year, with property stocks having also largely recovered and REITS emerging as the standout performers.
“If you look at the REITs as a basket… the REITs sector as a basket is up by 22.5 percent,” Angel said, emphasizing the sector’s resilience and noting that it are less susceptible to short-term shocks because REITs are backed by long-term lease agreements and tangible assets.
“They are very solid. They’re not affected so much by short-term, midterm news… because, again, the dividends are based on contracts that are 3, 5, 7, 10 years in nature,” he said.
Angel suggested that REITs should be a “critical part of every real estate investment portfolio,” citing their stability and ability to generate predictable income even during turbulent times.
“These dividends are not going to change because of, for example, news [of Trump imposing 20 percent tariff on Philippine exports]… That’s why we like REITs. They’re very solid, not just in times of crisis, but now also even in this turn that the market is taking for the positive.”
As of July 9, RL Commercial REIT Inc. was up 43.8 percent year on year, followed by AREIT Inc. (19.4 percent), Filinvest REIT Corp. (15.3 percent), MREIT Inc. (10.3 percent) and VistaREIT Inc. (8.7 percent).
DDMP REIT Inc. was the only one to have declined, by 7.8 percent.
All six REITs are projected to have higher estimated yields, with VistaREIT at 10.27 percent, DDMP (8.75 percent), Filinvest REIT (7.47 percent), MREIT (7.15 percent), while AREIT and RL Commercial have an estimated yield of 5.58 percent and 5.45 percent, respectively.
The resurgence of the property market comes alongside broader macroeconomic support, Angel added, particularly from the Bangko Sentral ng Pilipinas’ (BSP) easing cycle.
The central bank has slashed interest rates by a total of 125 basis points over the last six policy meetings, from a high of 6.5 percent in August 2024 to the current 5.25 percent, with BSP signaling further cuts of up to 50 basis points for the rest of the year, potentially lowering the rate to 4.75 percent.
“These decisions are supported by a strong inflation performance,” he said, citing recent consumer price index figures of 1.3 percent in May and 1.4 percent in June, well within the BSP’s target.
“That’s why we have so much optimism and confidence in their ability to cut rates.”
RL Commercial shares were down 7 centavos to P7.38, while AREIT’s and Filinvest REIT’s were up 5 centavos to P41.05 and up 2 centavos to P3.32, respectively, on Friday.
MREIT was unchanged at P14.06 apiece, as was VistaREIT at P1.87, amid a 0.05-percent dip for the benchmark Philippine Stock Exchange index.
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