Ayala Land launches first local REIT
Exciting times up ahead as Ayala Land (AREIT) rolls out the first REIT (real estateinvestment trust) in the country. The initial public offering for AREIT will be Php27 a share and the offer period will be from July 27 to August 3.
If you're equally clueless as I am as to what a REIT is, this short video from COL Financial's Marvin Fausto is a good way to jumpstart your research.
The way I understand a REIT is that it is an investment into a real estate company, so when you buy a REIT you become a part owner of that company in the same way that buying stocks of a company makes you a part owner of that company. REIT = stocks in a real estate company.
What's different about REITs from other stocks though is that 90% of its income is earmarked to be issued as dividends to its stockholders. So you have two ways of earning income from a REIT, through dividends and stock price appreciation.
I'm not big or liquid enough to participate in the AREIT IPO, but I'll definitely keep an eye out for its listing in the local stockmarket by August 13.