EXCLUSIVE: Why RLC REIT Is Country's Biggest, According to Robinsons Land President Frederick Go

And what’s it like to work on the listing in the time of a pandemic.

The Philippines will soon have its fourth listed real estate investment trust (REIT) after the Philippine Stock Exchange approved the application of RL Commercial REIT (RCR) last week. The listing is sponsored by Robinsons Land Corp., the property development firm owned by the Gokongwei family. 

This is the fourth REIT company to go public in the Philippines, after Ayala Land’s AREIT, DoubleDragon’s DDMP REIT, and the Gotianuns’ Filinvest REIT Corp (FILRT). However, this particular listing is significant for a number of reasons, according to RLC President and CEO Frederick Go. Esquire Philippines chatted with Go about the specifics of the listing in this exclusive Q & A. Excerpts:

Esquire Philippines: Please tell us the beginnings of RLC's planned REIT offer. When and how did the company first decide to list this unit and turn it into an REIT company?

Frederick D. Go: We have been wanting to do a REIT listing for a long time. Background: When the REIT law was passed over a decade ago, the larger real estate companies were very excited to do REIT companies, but there were roadblocks in the way. Fortunately, the current Finance Secretary Carlos Dominguez is supportive of REITs, which is why the country’s economy is benefitting greatly from this REIT boom now. This is also the reason why it is only in the last year that REITs have become a reality. In his wisdom, Dominguez knew that this would be a catalyst for economic expansion.

Going back to RLC, when the DOF approved legislation that would pave the way for REITs to happen, RLC started to put together the team to undertake the creation of a REIT vehicle and its potential listing.   


Apart from the funds it would be able to raise, what other advantages did the RLC consider with this listing offer?

FDG: Background: the REIT law and regulations grant the REIT companies with income tax exemptions to the extent of the net income it distributes to its shareholders.

We believe that REITs are an excellent way to recycle capital. It is a proven model that has worked in many countries overseas.

Please tell us the complete portfolio included in the REIT offer. Will more be infused in the future?

FDG: The market capitalization is P64.2 billion at P6.45 per share, making us the LARGEST REIT in the Philippines by potential market capitalization.

The portfolio has 14 buildings with a total gross leasable area of 425,000 square meters and a portfolio valuation of P73.9 billion according to an independent appraiser—two facts that make us THE BIGGEST REIT in the Philippines in terms of asset size.

The assets are spread across nine cities: Makati, Taguig, QC, Pasig, Mandaluyong, Naga, Cebu, Tarlac, and Davao, which makes us have THE WIDEST geographical coverage among all REITs in the Philippines.

The portfolio has an average land lease of 89 years, which makes the portfolio have THE LONGEST land lease period.

Could you give us a profile of the type of investors you're looking to attract with this offer? How much will go to institutional investors and how much will be made available to local and retail investors? 

FDG: By regulation, 30 percent of the offering will go to the local small investors and the trading participants of the Philippine Stock Exchange (PSE). The balance will be offered to institutional investors, both domestic and international.

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There is something unique in what we are doing here—the bravery and confidence in the size of RCR is something other REITS in the market do not have. Our bankers think that the huge size of our IPO will attract the largest global funds to take interest in the offering. The large market capitalization and offering will give the biggest fund investors in the world the liquidity and attractiveness they seek.

How do you plan to utilize the funds raised in the IPO?

FDG: RLC will be immediately investing the funds in our Philippine projects: malls, offices, residences, hotels, industrial and logistics facilities, and Destination Estates among others. RLC believes that the various property market sectors will rebound strongly after the fear of this pandemic goes away.

What are your thoughts on working on and launching the IPO in the midst of a global pandemic? What is your general outlook for business and the economy over the next few months?

FDG: It is very challenging, of course. But we are confident that the high quality of our assets (we put in our crown jewels), the high quality of our tenant base (the BPOs), the excellent management team, the wide geographical coverage, the diversification, and reduction of location, asset, and clientele risk, the long land lease, the size of the offering, and the size of RCR itself are attractive points that are not lost on the market. 

We have garnered positive feedback from the potential investors on why they like the company and the strategies we have put together to make it the bellwether of the Philippine office REIT market.


Many of the commercial spaces in RCR's REIT portfolio are leased for office purposes. What is RLC's and RCR's position on this with regards to the current health situation and many companies switching to work-from-home (WFH) arrangements? Do you see demand for office spaces going back up eventually?

Majority of our locators are in the IT-BPM or BPO sector.

  1. A BPO employee in a WFH environment is less productive than in the BPO office with all the right equipment, tools of the trade, temperature, and environment.
  2. The typical home in the Philippines is not conducive for working. Perhaps for those in the A or upper B social demographic, working from home is possible, but definitely not for the vast majority of the workforce. Homes are usually cramped, full of distractions, with no quiet, dedicated workspaces.
  3. Data connectivity in homes are generally lacking and difficult to be up to par with that in a BPO office.
  4. Data privacy, data security, and confidentiality agreements become major issues if a client’s private data is brought to an employee’s home. Banks and financial institutions for example can never allow this. The medical industry is also very sensitive to patients’ information.
  5. BPOs and a lot of companies need to maintain the PEZA status; “Z” stands for zone. To avail of the PEZA incentives, the companies have to operate within the “zone.”
  6. Isolation, mental health, and depression issues. These are quite serious. There is already a clamor from some sectors of wanting to go back to work because of this.
  7. Can go on and on here, but suffice to say, productivity at home cannot match productivity at a world-class office space.

What we are seeing is that our clients continue to look for additional or expansion space even during this pandemic / quarantine. They tell us that their international clients continue to look at expansion or are expecting their businesses to rebound strongly after this pandemic.

We believe that with the government’s current aggressive vaccination program, office workers will be able to safely return to work soon. The industry was very resilient even at the height of the quarantine last year when we didn’t know anything about the virus. Now, we are better prepared, a significant percentage of the NCR office workforce has been vaccinated, and the situation should get better as health experts all over the world learn more about this virus and how to battle with it.

Other REIT companies that have already listed in the stock market have a “hook” that differentiates them. For example, AREIT was the pioneering REIT in the country and FILREIT claims to be the first sustainability themed REIT. What is different about the REIT offer of RCR?

FDG: RCR has many unique features that are beyond compare:

- LARGEST in terms of value

- BIGGEST in terms of asset size, leasable area

- WIDEST in geographical coverage

- LONGEST in land lease tenure 

And at the same time, we have solid ESG programs that are in place. For example, TERA tower is LEED Gold certified, while EXXA and ZETA Towers are LEED Silver certified.


What other projects are in the pipeline for RLC beyond RCR and the REIT offer? 

FDG: The listing of RCR is just the first step. It is our goal to grow RCR by continuously infusing assets into it in the short, medium, and long term. The inorganic growth of RCR will have the full support of its sponsor, Robinsons Land Corporation. RLC has a huge portfolio of office assets not yet injected into RCR, as well as projects under construction, and BPO spaces in its malls that could potentially be infused into RCR in the future.

Esquire Philippines is published by Summit Media, which is a business unit also owned by the Gokongwei family.

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Paul John Caña
Associate Editor, Esquire Philippines
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