MANILA, Philippines - The listing rules for Real Estate Investment Trusts (REITs) have been approved by the local bourse on Wednesday, and are now awaiting the Securities and Exchange Commission's (SEC) approval.

"We are optimistic that the launch of REITs in the Philippines will generate significant interest from investors both here and abroad as real estate prospects are looking good given that the economic recovery is expected to promote commercial activity and restore investor confidence," said Philippine Stock Exchange Chief Operating Officer Val Antonio Suarez.

The REIT listing rules are aligned with Republic Act. No. 9856, otherwise known as the REIT Act of 2009, and its implementing rules and regulations, which were issued by the SEC.

REITs are companies that own and operate income-generating real estate assets, which include offices, apartment buildings, hotels, warehouses, shopping centers and highways.

Under the rules, a REIT must be a stock corporation established in accordance with the Philippine Corporation Code for the purpose of owning income-generating real estate assets. It must also have a dividend policy of distributing annually at least 90% of its distributable income as dividends to its shareholders in accordance with the REIT law.

At least 75% of the deposited property of the REIT must be invested in income-generating real estate.

Suarez said prospects for the real estate industry are upbeat this year due to the steady increase in remittances, low inflation, and sustained patronage of retail malls.

"The current economic conditions coupled with the appropriate legal and regulatory framework in place creates a very conducive environment for the launching and introduction of REITs in the Philippine market. The launching of REITs in the Philippines is expected to further develop the real estate industry by releasing capital into land and buildings, increasing productivity and generating jobs." he noted.

In 2009, the aggregate market capitalization of listed firms engaged in real estate surged 56.5% as markets recovered and stock valuations increased. In terms of earnings, listed property firms registered an 11.8% increase boosted by the spike in sales from residential condominium units.