Philippines’ first real estate investment trust company led by Ayala, AREIT Inc, had its initial public offering at P27 per share.
According to the Securities and Exchange Commission Chairman Emilio Aquino in the listing ceremony of AREIT Inc, three more property developers have indicated their interest in forming and listing their own REITs in the Philippine Stock Exchange.
However, the share price of AREIT fell to P24.90 per share, down 7.8 percent from its initial public offering price.
This follows the slow real estate market recovery trend as reported by JLL Philippines’ head of research and consulting, Janlo delos Reyes.
Still, major shareholders in the real estate market remain optimistic in the resilience of the Philippine real estate sector.
Before the pandemic, the Philippines’ construction sector amounted to approximately 195.3 billion Philippine pesos in the 4th quarter of 2019.
The growth of the industry amounted to as much as over 15%, and now the Philippine economy has seen a down turn as the Philippines’ economy plunged 16.5% in the second quarter of 2020.
The Philippine government’s economic team projects that the economy as a whole would shrink 5.5% for the entire year.
Real Estate Prices have plummetted all over the world following the trend of a global recession. An increase in desperate sellers directly affect the market prices of their properties and the economic standing of the real estate industry as a whole. Despite this, the real estate market in the Philippines seems to remain resilient.
Amid the current situation of a recession, the Philippines’ Real Estate industry has seen an increase in the number of buyers, as well-known developers of prime areas in the country have held firm on the prices on properties, or have released notices of price increases.
The reason behind the optimism of shareholders about the real estate market is this:
People have realized the true value of a home. Aside from being our personal safe-haven after a long day of work, the global pandemic has reminded everyone that a home is where you are safe at turbulent times.
A home now even acts as your office.
The importance of a Real Estate has been highlighted by a crisis, and when people realize what is important to them, they hold on to it more tightly.