GT Capital says REIT launch not a priority

GT Capital Holdings, Inc. said that establishing a real estate investment trust (REIT) unit is not a priority as the company focuses on expanding its property portfolio.

“It’s not going to happen because, in order for you to have a meaningful REIT, you need to have income-earning assets of a meaningful size. We don’t have that yet,” GT Capital Chief Financial Officer George S. Uy-Tioco, Jr. told reporters on the sidelines of a forum in Taguig City last week.

“If you were to rank things on our list of priorities, that’s (REIT) not even in the top list,” he added.

In June, GT Capital said it was open to the possibility of establishing and listing its own REIT unit once the “right conditions” are present and its real estate subsidiary Federal Land, Inc. boosts its recurring income.

However, Mr. Uy-Tioco said that GT Capital is not yet in a position to take advantage of having a REIT subsidiary.

“We’re open to looking at different funding mechanisms. If a REIT funding mechanism is an opportunity that is there for us, why not? However, in order for us to make that meaningful, we need to have a large enough rental income or recurring income base,” he said.

Asked about Federal Land’s initial public offering (IPO) plans, Mr. Uy-Tioco said it is still too early as the property developer is still growing its presence.

“It is not big enough yet. We have not talked about that in terms of our strategic planning,” he said.

“If you want to do a meaningful IPO, you need to have a certain size. For us, the level of development and the level of maturity of the company, we are not there yet. It is going to take a while,” he added.

Mr. Uy-Tioco also said that GT Capital is still studying its plans to expand into healthcare, renewable energy, and data centers.

“It’s too premature for us to expound on that because we’re studying it. In the instance of healthcare, there are a lot of groups that are going into it. We want to choose where we think we can add the greatest value that will also give us the best returns,” he said.

“We want to have a more direct say. We like working with partners, but we also want to have a more direct say in a specific sector,” he added.

GT Capital has interests in banking, automotive assembly, importation, dealership, and financing, property development, life and general insurance, and infrastructure. — Revin Mikhael D. Ochave