RA 9856 established the framework for Real Estate Investment Trusts (REITs) corporations created to own and manage income-generating properties such as office towers, malls, hotels, hospitals, and infrastructure. Unlike traditional real estate ownership, REITs allow individuals to invest by purchasing shares traded on the stock exchange, thereby lowering barriers to entry and expanding investor participation.
For developers, REITs serve as a mechanism to unlock capital from existing assets, which can then be reinvested into new projects, sustaining growth and driving continuous development across the sector.
Key Features of the REIT Law
RA 9856 set clear guidelines on how Real Estate Investment Trusts (REITs) should operate, making sure they remain stable, transparent, and rewarding for investors.
To start, REITs must be anchored on income-generating properties such as offices, malls, hotels, hospitals, or even infrastructure projects. This focus ensures that investments are backed by assets with steady and reliable cash flows.
The law also requires a strong level of public ownership, meaning that a significant share of REITs must be available to the investing public. This not only builds transparency but also opens doors for more Filipinos to participate in real estate investment.
One of the most attractive features is the rule on dividend distribution. At least 90% of a REIT’s income must be given back to shareholders every year, providing investors with regular and consistent returns.
Lastly, the law provides tax incentives to encourage the growth of the REIT market in the Philippines. These benefits make REITs more appealing to both local and foreign investors and help fuel more development in the property sector.
Why Does RA 9856 Matter?
RA 9856 plays a transformative role in democratizing real estate investment in the Philippines. By allowing both individual and institutional investors to take part in large-scale developments through shares, the law removes the barrier of high capital requirements. At the same time, it provides developers with a mechanism to unlock liquidity from existing assets, fueling reinvestment into new projects and stimulating growth in construction, infrastructure, and job creation.
At PRIME Philippines, we recognize RA 9856 as a powerful tool that bridges property growth and investor participation. By guiding clients through the REIT landscape, we ensure that opportunities are maximized with transparency, sound strategy, and long-term value thereby empowering both investors and developers to be part of the country’s progress.
