Shopping Mall Developer and operator SM Prime Holdings, Inc. will wait for the enactment of proposed law on real estate investment trust (REITs) before it considers listing in other exchanges, Executive Vice-President Jeffrey C. Lim said.

The bill which proposes to provide incentives for REITs, or publicly trade companies that sell stocks of bonds and invest the proceeds in real estate, was filed by Sen. Edgardo Angara and is pending before the Congress. “We have looked into that (other markets) but we have to wait until the bill in the 
Philippines (is enacted). If we go out and list outside like in
Singaporewhile there is no incentive here, there is no point. There has to be an incentive for investors to look at your REITs,  he said.

REITs are traded in Japan, South Korea and Singapore, US and 
Australia. REITs would not only allow the Philippines to participate in the globalization of the real estate investment markets but also contribute to the growth and development of the capital markets and the economy through increased investment activites, the Angara bill’s explanatory note states. Under the bill, REITs are exempted from income, documentary stamps, and value-added taxes as well as income tax on dividends.

In return for the tax exemptions, the companies must distribute at least 90% of their net income before extraordinary item, depreciation and amortization as dividend to shareholders.

Income on the sale of the REIT’s assets that are reinvested in the REIT one year from the date of the sale are exempted from the dividend requirements. At least 70% of the deposited property of the REIT should be invested to allowable investments.