Tollways, airports, and data centers could shape next REITs, analysts say

TOLLWAYS, airports, and data centers could shape the next generation of real estate investment trusts (REITs) in the Philippines, analysts said, as the Securities and Exchange Commission (SEC) has broadened eligible assets beyond traditional properties.

“If you’re going to look at the expanded definition of REIT-able assets, if there’s one thing that it does is it makes the REITs become a better representative of the general economy,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said during a panel discussion at the BusinessWorld Insights Stock Market Outlook 2026 on Feb. 23.

“With the expanded definition, we will have more REITs available which represent different industries, so it’s a better representation of the general economy. And with this, investors will have more options to choose from,” he added.

SEC Memorandum Circular (MC) No. 1, Series of 2026, clarifies that income-generating real estate now includes assets with regular or predictable cash flows such as leases, rentals, tolls, user fees, ticket sales, parking, and storage fees. Covered assets include toll roads, railways, airports, ports, information and communications technology and energy infrastructure, data centers, parking facilities, malls, warehouses, fixtures, and real rights such as usufructs, easements, and leases.

“I think over time you will see new REITs coming up that are more infra-themed rather than traditional-themed property REITs,” said Jesus Mariano P. Ocampo, president and chief operating officer of Investment & Capital Corp. of the Philippines (ICCP).

“We’re very happy that the Securities and Exchange Commission recognized this by specifically stating tollways as maybe a new REIT class to come out,” he added.

The SEC said the amendments are aligned with the objectives of the REIT Act by expanding eligible income-generating assets and allowing unlisted special purpose vehicles (SPVs) and incorporated joint ventures (JVs), consistent with global practices.

Alessandra P. Araullo, chief investment officer at ATRAM Trust Corp., highlighted the two key changes — the wider range of eligible REIT assets and a two-year reinvestment window — as providing a larger pool of potential deals and supporting an asset-light model for developers.

“[The two major changes] I think are very favorable in the sense that sponsors are not rushed to deploy just for the sake of meeting that deadline. And really for investors, the combined effect is both a larger pipeline of potential REIT assets and also better-quality injunctions,” Ms. Araullo said.

“And I think in the end it makes for a structurally stronger development model for the asset-light approach that a lot of the integrated developers have been moving towards,” she added.

The SEC extended the reinvestment period for REIT sponsors or promoters to two years from one, starting from the receipt of proceeds from the sale of REIT shares or income-generating real estate. Reinvestment options include equity investments, loans, debt purchases, or repayments related to real estate or infrastructure projects in the Philippines.

REITs investing through unlisted SPVs or JVs must ensure these entities distribute at least 90% of distributable income to the REIT and other shareholders before the REIT pays dividends. Noncompliance constitutes a breach of the REIT’s 90% dividend payout requirement.

John Tristan Guillermo D. Reyes, president of BDO Securities Corp., explained the implications from both the issuer’s and the sponsor’s perspective.

“It would allow the sponsor more options for capital recycling. And on the investor’s part, aside from generating yields from the traditional assets like malls, offices, you have infra, data centers that would diversify the revenue stream and would support dividend growth over the long term,” he said.

Analysts identified tollways as prime candidates for quick adoption of the expanded definitions, citing reliable daily toll revenues. Airports and seaports could follow.

“Tollways would be natural. But maybe I’ll also mention airports, seaports with the new concessions granted by the government,” Mr. Ocampo said.

“Maybe the government should [also] consider, the concession grantees should look at the options of going public as one of the reasons. If you’re wanting to promote new issuers to come to market, maybe that could be something to consider,” he added.

“Because concessions grant a particular group, for lack of a better term, a monopoly. Maybe sharing that monopoly is something that may democratize the group.”

Telecommunications-related properties also emerged as potential candidates, driven by investor interest in artificial intelligence (AI)-linked infrastructure.

“We know that in the Philippines, the telecommunications sector is our best proxy variable for the trend right now, which is artificial intelligence. And so once they are introduced in the market, there could be glamor with respect to the investors because this is the trend right now,” Mr. Tantiangco said.

“Investors are going to look at where I can get closest to the global trend right now, which is AI. So, if we see telecommunications sector-connected leads, then there’s a possibility that a lot of investors are going to go into it,” he added.

Ms. Araullo stressed the importance of examining the income stream within REITs to assess value.

“And at the end of the day, the value of REITs comes from the income stream. So, for me, the devil is in the details,” she said.

In addition to expanding asset eligibility, the revised rules redefine public shareholders to promote broader ownership and stronger governance.

Investors with vested interests or influence — including sponsors, promoters, affiliates, and key officers — are excluded from the public float count. Public shareholders are defined as those without “substantial influence,” considered as direct or indirect ownership of 10% or more of REIT shares. The exclusion also covers investors with less than 10% ownership who can influence management or operations, including immediate family members of directors, officers, or principal shareholders living in the same household.

The Philippines currently has eight listed REITs across office, hotel, mall, land, renewable energy, and infrastructure segments. These include AREIT, Inc., DDMP REIT, Inc., Filinvest REIT Corp., RL Commercial REIT, Inc., MREIT, Inc., VistaREIT, Inc., Citicore Energy REIT Corp., and Premier Island Power REIT Corp. — A.G.C. Magno