The year 2020 started right for the viability of REITs or real estate investment trusts. The last of the major roadblocks for the creation of REITs has finally been removed, more than ten years after the passage of Republic Act (RA) 9856, or “REIT Act,” in December 2009.
In Securities and Exchange Commission (SEC) Memorandum Circular (MC) 1, Series of 2020 issued on Jan. 20, 2020 (Amended REIT Implementing Rules and Regulations [IRR]), the SEC lowered the required minimum public ownership (MPO) requirements of REITs to only one-third. This significantly reduced the MPO requirement that SEC previously set at 40 percent in the first year, to be increased to 67 percent within three years (SEC MC 2, series of 2011).