Philippine real estate investment trusts (REITs) sustained revenue momentum last year.
Still the sector’s outlook has shifted, as economic headwinds intensify and government bond yields rise.
Asset infusions drove aggregate revenue to grow 24% year-on-year (YoY) in 2025.
RL Commercial REIT, Inc. (RCR) led with 35% revenue growth. Its retail assets operate under variable rent structures tied to tenant gross revenues, allowing it to capture the consumption upside directly.
In contrast, AREIT, Inc. and Filinvest REIT Corp. (FILRT) have long-term fixed master leases with guaranteed yields and built-in escalations that prioritize predictability. Meanwhile, MREIT, Inc. employs a similar fixed-rent structure without long-term lock-in.
However, aggregate earnings per share growth was flat. Robust performances at RCR and AREIT were offset by sharp declines at MREIT and FILRT. This indicates that the latter two's infused assets failed to generate earnings accretive returns relative to the equity raised.
In terms of dividends per share (DPS):
Still the defensiveness of REITs remains intact, given stable lease structures and healthy occupancy. The energy-cost pressures appear manageable, as AREIT, MREIT, and FILRT increasingly use renewable energy and RCR benefits from a fixed-cost electricity contract.
Fundamentally, AREIT, RCR, and MREIT maintain solid outlook, with visible asset infusion pipelines that should support dividend growth, complemented by attractive yields at current prices.
However, economic headwinds have intensified, as the Philippines’ bond yield curve shifted upward. The 10-year benchmark bond rising 78 basis points following escalations of the Middle East conflict. This eroded REITs’ attractiveness versus fixed income instruments.
With the Bangko Sentral ng Pilipinas' recent policy rate hike, elevated interest rates continue to weigh on equity valuations.
Thus, a shift to neutral on AREIT, RCR, and MREIT, is prudent, with willingness to turn constructive as the interest-rate backdrop stabilizes. FILRT remains to have a bearish view despite offering the highest yield, as the lack of a clear asset infusion roadmap leaves its DPS trajectory pressured.
Express this view through Metrobank Trust’s Metro High Dividend Yield Unit Paying Fund, a Unit Investment Trust Fund (UITF) that targets return through a portfolio of high dividend yield stocks, including select names discussed here such as AREIT Inc. (AREIT), RL Commercial REIT, Inc. (RCR), and MREIT, Inc. (MREIT).
CHARLES RANDY LUMHOD is an Equity Research Analyst of Metrobank’s Trust Banking Group. His coverage includes shipping, properties, REITS, and consumers, as well as select offshore markets. He holds a Bachelor’s degree, cum laude, in Business Administration major in Financial Management from the University of Santo Tomas. He is also a Certified Treasury Professional and Certified UITF Salesperson and is currently pursuing other industry certifications. Outside work, he stays active by running and going to the gym.
GENEVIEVE PECAÑA is the Head of Investment Services Division at Metrobank’s Trust Banking Group, overseeing fixed income and equity investment analysis, offshore fund selection, portfolio and performance analytics, and trade execution across all asset classes. Ginny has garnered multiple awards for fund management with her decades of banking experience. She holds a Bachelor’s degree in Business Management from the Ateneo de Manila University as well as various finance certifications in Trust and Treasury operations, and as UITF and SEC Salesman. She loves travelling the world and watching movies.
