Hybrid work, POGO exit temper REITs growth, economists say
MANILA, PHILIPPINES — Economists are anticipating real estate investment trusts (REITs) to pick up as the economy opens up, but hybrid work and the exodus of Philippine offshore gaming operators (POGOs) will likely stunt its growth and expansion.
“The economic reopening narrative would still be the important consideration for the business and sales and overall valuations of REITs,” Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said.
“This would be counterbalanced though by the continued work-from-home or hybrid arrangements for some BPOs (business process outsourcing) and some reduction in POGO business since the pandemic started and also amid tighter regulations on POGOs in recent months,” Ricafort added.
As mandated by the Fiscal Incentives Registration Board (FIRB), an interagency government body that grants tax incentives to registered business enterprises (RBEs), firms can still transfer their registration to the Board of Investments (BOI) until Jan. 31.
By transferring their registration from the Philippine Economic Zone Authority (PEZA) to BOI, RBEs can continue to enjoy tax benefits despite implementing work-from-home arrangements.
China Bank Securities Corp. Research Director Rastine Mackie Mercado said that continued growth in economic activity could help shore up occupancy and rental rates of office and retail REITs.
“Apart from this, revenue growth could also be supported by annual rental escalation, and incremental revenues from asset infusions,” Mercado added.
Many REITs have posted three-year investment strategies in which they have expressed a positive outlook for the coming years. Philippine Stock Exchange, Inc. said it expects more REITs to list in 2023.
