Adviser

Means a lawyer, accountant, auditor, financial or business consultant, and such

other persons rendering professional advisory services to REIT.

Affiliate
Means a corporation that directly or indirectly, through one or more intermediaries,
is controlled by, or is under the common control of, another corporation, which
thereby becomes its parent corporation.

Corporation Code
Refers to Batas Pambansa Bilang 68.

Deposited Property
Means the total value of the REIT's assets reflecting the fair market value of the
total assets held by the REIT.

Distributable Income
Means net income as adjusted for unrealized gains and losses/expenses and
impairment losses, and other items in accordance with internationally accepted
accounting standards.

Distributable income excludes proceeds from the sale of the REIT's assets that are
re-invested in the REIT within one (1) year from the date of the sale.

Exchange
Means any entity registered with the Commission as a stock exchange pursuant to
the Securities Regulation Code.

Fund Manager
Refers to the person engaged by the REIT to perform such functions enumerated in
these Rules.

Income-generating Real Estate

Means real property which is held for the purpose of generating a regular stream of
income such as, but not limited to, rentals, toll fees, user's fees, ticket sales,
parking fees and storage fees.

Independent Director
Means a director who has the qualifications and none of the disqualifications of an
independent director as specified in the Securities Regulation Code and its
Implementing Rules and Regulations.

Investible Funds
Refers to funds of the REIT that can be placed in investment vehicles other than
income-generating real estate, as allowed under these Rules.

Investor
Means the owner of Investor Securities.
Investor Securities
Means shares of stock issued by a REIT or derivatives thereof.

IRR
Refers to the Implementing rules and regulations promulgated to implement the
provisions of this Act.

Managed Funds
Means any arrangement whereby funds are solicited from the investing public and
pooled for the purpose of investing in securities duly registered and/or approved by
the appropriate regulatory agency of the government for investment and/or
reinvestment by the REIT.

Property Value
Means an independent entity engaged by a REIT to value its real estate in
accordance with these Rules.

Real Estate Investment Trust (REIT)

Is a stock corporation established in accordance with the Corporation Code of the
Philippines and the rules and regulations promulgated by the Commission
principally for the purpose of owning income-generating real estate assets.

For purposes of clarity, a REIT, although designated as a "trust", does not have the
same technical meaning as "trust" under existing laws and regulations but is used
herein for the sole purpose of adopting the internationally accepted description of
the company in accordance with global best practices.

Synthetic Investment Products

Are derivatives and other securities created exclusively out of one or more financial
instruments to simulate the returns of the underlying assets or indices of asset
values, including, but not limited to warrants, options, interest rate derivatives,
currency derivatives, equity derivatives and credit derivatives such as credit-linked
notes, collateralized debt obligations, total return swaps, credit spread options and
credit default options.
 REAL ESTATE INVESTMENT TRUST

Republic Act No. 9856 - "The Real Estate Investment Trust (REIT) Act of
2009".

Investment in the REIT

1. Investment in a REIT shall be by way of subscription to or purchase of

shares of stock of the REIT.

2. A REIT may provide in its Articles of Incorporation different classes of shares

of stock enumerating therein their respective features.

3. No shares of stock of the REIT shall be offered for subscription or sale to

Public Shareholders except in accordance with a REIT Plan registered with
and approved by the Commission. The REIT Plan shall take the place of a
prospectus. It shall contain the following information:

a. investment policy, restrictions and strategy of the REIT;

b. discussion on the business plan for property investment and

management covering the scope and type of investments made or
intended to be made by the REIT, including the type(s) of real estate
(e.g. leisure, residential, commercial, or industrial);

c. general character and competitive conditions of all real estate now

held or intended to be acquired by the REIT and how such real estate
meets the established criteria for selection;

d. nature and risks of making property investments in each of the

relevant locations, including:

i. demographics;
ii. state of the economy, economic risks and foreign exchange risk;
iii. political risks;
iv. legal risks and tax considerations;
v. policies that affect property investments and property sales;
vi. overview of the property market;

vii. analysis of the specific property sector and the competitive

dynamics in the rental market;
viii. operational requirement; and
ix. rules and regulations governing property ownership and tenancy
matters;

e. terms and conditions of the arrangements or agreements that have

been entered into by the REIT for it to own legal and beneficial title over
specific property, and the benefits and risks of such arrangements
including but not limited to, any agrarian-related issues, if any;
f. transaction history of the relevant property in the three (3) years
immediately preceding the date of the valuation report included in the
REIT Plan;

g. any proposed program with timetable for renovation or improvement

to the real estate, including the estimated costs thereof and the method
of financing to be used;

h. the operating date of each of the real estate, including the occupancy
rate, number of tenants and its mix in terms of occupation or business,
principal provisions of the leases, average annual rental per square
meter, and schedule of lease expirations for the next three (3) years;

i. the borrowing policy and the method or proposed method of operating

and financing the real estate investments of the REIT;

j. where real estate to be acquired are to be financed (wholly or in part)

through borrowings, details of the borrowings must be disclosed
including, but not limited to, the source, type, term/period and nature of
the borrowings and the interest rate to be paid by the REIT and the risks
involved with respect to borrowings;

k. the measures in place to mitigate or minimize risks relating to the

investment and management of real estate owned by the REIT;

l. the dividend policy;

m. the insurance arrangement for the assets of the REIT;

n. the exit strategy in the event of divestment (including the exit from
any joint ownership arrangement), factors and risks which may impact
or act as an impediment to an exit, and the contingency plan;

o. details of transactions or agreements entered into with related

parties;

p. full particulars of the nature and extent of the interest, if any, of any
director of the REIT, the Fund Manager, the Property Manager or any
Related Parties to the REIT, in the property owned or proposed to be
acquired by the REIT; and where the interest of such a director consists
in being a partner in a firm, the nature and extent of the interest in the
firm, with a statement of all sums paid or agreed to be paid to him or the
firm for services rendered to the REIT;

q. functions, duties and responsibilities of the Property Manager and the

Fund Manager and, where applicable, shareholding of the Property
Manager and/or the Fund Manager in the REIT;

r. corporate information on the Property Manager, including number of

years in real estate/property management or alternatively, information
on two (2) responsible officers who have at least five (5) years track
 record in real estate/property management, total assets under
management, staff strength, resources, internal controls and risk
management system;

s. information on the directors and Principal Officers of the Property

Manager, highlighting the academic and/or professional qualification as
well as experience possessed by the respective personnel;

t. corporate information on the Fund Manager, including number of

years in fund management, total assets under management, staff
strength, internal controls and risk management system;

u. information on the directors and Principal Officers of the Fund

Manager, highlighting the academic and/or professional qualification as
well as experience possessed by the respective personnel;

v. details on substantial fees to be paid by the REIT, such as property

management fees and fund management fees. The fees paid to the
Property Manager and the Fund Manager must be clearly stated and
shall include: (i) the percentage rate to be paid by the REIT; (ii) the
basis on which the property management fee is calculated; and (iii) an
illustration on how the fee is calculated;

w. names, designation and the direct and indirect shareholdings in the

REIT of Promoters, Principal Shareholders, directors, Principal Officers
and principal officers of the Property Manager and the Fund Manager;

x. disclosure on how the proceeds of the public offering and any other
funds raised in connection with the public offering will be utilized with
timetable; and

y. pro-forma financial statements which shall include information on Net

Asset Value and Net Asset Value per share before listing and after the
proposed public offering.

4. In order to be valid, any material amendment to the REIT Plan shall be

approved by the Commission. Any amendment to the Plan shall be
effective only upon compliance with the requirements relative to said
amendment/s.

Registration and Listing

he shares of stock of the REIT must be registered with the Commission
and listed in accordance with the rules of the Exchange.

Nationality Requirement
A REIT that owns land located in the Philippines must comply with foreign
ownership limitations imposed under Philippine law.
Dividend Distribution
A REIT must distribute annually at' least ninety percent (90%) of its
distributable income as dividends to its shareholders not later than the
last day of the fifth (5") month following the close of the fiscal 10 year of
the REIT.

(a) The dividend shall be payable only from the unrestricted retained
earnings of the REIT as provided for under Section 43 of the
Corporation Code. However, the retained earnings of the REIT may
only be restricted and not available for distribution under the
circumstances enumerated under Section 43 of the Corporation Code
and when approved by at least a majority of the entire membership of
the board of directors, including the unanimous vote of all
Independent Directors of the REIT; provided finally, once the purpose
of the restriction is accomplished, the REIT shall immediately cancel
the restriction and distribute the corresponding retained earnings
upon majority vote of the members of the board of directors.

(b) The percentage of dividends with respect to any class of stock to

be received by the Public Shareholders to the total dividends with
respect to that class of stock distributed by the REIT from out of its
Distributable Income must not be less than such percentage of their
aggregate ownership of the total outstanding shares of the REIT with
respect to that class of stock. Any structure, arrangement or provision
which would have the effect of diminishing or circumventing in any
form this entitlement to dividends shall be void and of no force and
effect.

(c) The income distributable as dividend by the REIT shall be based

on the audited financial statements for the recently completed fiscal
year prior to the prescribed distribution. The audited financial
statements of the REIT shall present a computation of its distributable
dividend taking into consideration requirements under the provisions
of the Act and this Rule. However, the audited financial statements
shall not be required before the REIT can distribute quarterly and/or
semi-annual dividends; provided, the REIT has reasonable grounds
to believe that the maximum dividends that it may distribute in such
fiscal year shall not be more than its Distributable Income based on
its audited financial statements for such fiscal year, as provided
above.

(d) A REIT may declare either cash, property or stock dividends.

Provided that, in addition to the requirements of the Corporation
Code, the declaration of stock dividends must be approved by at
least a majority of the entire membership of the board of directors,
including the unanimous vote of all independent Directors of the REIT
and subject to approval of the Commission within five (5) working
days from receipt of the request for approval. If the Commission does
not act on said request within such period, the same shall be deemed
approved.
 (e) Distributable income excludes proceeds from the sale of REIT's
assets that are re-invested by the REIT within one (1) year from the
date of the sale. Gain from the said sale shall, however, form part of
the distributable income.

(f) The income distribute by the REIT shall be adjusted by deducting

the following unrealized or non-actual gains and losses:

(i) Unrealized foreign exchange gains, except those attributable to

cash and cash equivalents;

(ii) Fair value adjustment or the gains arising from marked-to-

market valuation which are not yet realized;

(iii) Fair value adjustment of investment property resulting to gain;

(iv) The amount of recognized deferred tax asset that reduced

the amount of income tax expense and increased the net income
and retained earnings, until realized;

(v) Adjustment due to a deviation from any of the prescribed

accounting standard which results to gain;

(vi) Other unrealized gains or adjustments to the income as a

result of certain transactions accounted for under the Philippine
Financial Reporting Standards.

(g) Non-actual expenses/losses that are allowed to be added back to

distributable income shall be limited to the following items:

(i) Depreciation on revaluation increment (after tax);

(ii) Adjustment due to from any of the prescribed accounting

standard which results to a loss;

(iii) Loss on fair value adjustment of investment property (after

tax).

Requirement
The REIT shall comply with the following requirements:

1. Body Corporate.

a. Minimum Public Ownership. A REIT shall be a public company

and to be considered as such, a REIT shall: (a) maintain its status
as a listed company; and (b) upon and after listing, have at least
one thousand (1,000) Public Shareholders each owning at least fifty
(50) shares of any class of shares, and who, in the aggregate, own
at least one-third (1/3) of the outstanding capital stock of the REIT.
 A REIT shall, from the time of incorporation, issue shares to, or
record the transfer of all its shares into the name of shareholders,
investors or, securities intermediary in the form of uncertificated
shares. It shall engage the services of a duly licensed transfer agent
to monitor subsequent transfer of the shares. Said registrar shall
ensure that the shares are traceable to the names of the
shareholders or investors and for their own benefit and not for the
benefit of any of the non-public shareholders.

The shares may be registered under a nominee and the nominee

shall make available to the transfer agent the names of the
shareholders in such frequency as may be necessary for the
transfer agent to perform its basic functions.

Compliance with the minimum public ownership requirement under

this section shall be duly certified by the transfer agent upon listing,
as of record date for any dividend declaration or any corporate
action requiring shareholder approval and other relevant times as
may be required by the Commission.

b. Capitalization. A REIT shall have a minimum paid-up capital of

Three Hundred Million Pesos (Php300,000,000.00) at the time of
incorporation which can either be in cash and/or property.

c. Independent Directors. At least one-third (1/3) or at least two (2),

whichever is higher, of the board of directors of a REIT shall be
independent directors.

d. Organization and Governance. As a public company, the REIT

shall have such organization and governance structure that is
consistent with the Revised Code of Corporate Governance and
pertinent provisions of the SRC and its IRR. The REIT shall hold
such meetings as provided for in its Constitutive Documents
pursuant to the Corporation Code.

2. Executive Compensation. The total annual compensation of all

directors and Principal Officers of the REIT shall not exceed ten percent
(10%) of the net income before regular corporate income tax of the
REIT during the immediately preceding taxable year, and shall be
governed by the disclosure requirements of PAS 24.

3. Fund Manager and Property Manager Fees. The REIT shall engage a
Fund Manager and a Property Manager in accordance with these Rules.
The fees received by the Fund Manager and the Property Manager from
the REIT shall not exceed one percent (1%) of the Net Asset Value of
the Assets under their respective management.
Functions of the REIT
Unless otherwise stated in these Rules, the REIT shall have all of the powers
of a corporation under the Corporation Code, and shall perform all of the
functions of a corporation, except those expressly delegated under these
Rules to the fund Manager and to the Property Manager, and those that are
necessary such as but not limited to the following:

a. appoint a Fund Manager, a Property Manager and a Property Valuer;

b. ensure that the financial and economic aspects of the REIT are
professionally managed in the interest of the shareholders and creditors.

c. formulate the annual investment strategy and policy of the REIT in

accordance with the REIT Plan;

d. determine the annual borrowing limit of the REIT, in accordance with

the REIT Plan;

e. determine the acquisition and disposition plan of real estate properties

in accordance with the investment objective indicated in the REIT Plan;

f. implement appropriate policies and conduct due diligence reviews such

that investments are made only after careful and diligent investigations by
the REIT;

g. formulate dividend payment schedules of the REIT;

h. maintain or cause to be maintained proper books and records of the

REIT and cause the preparation of the REIT's financial statements;

i. ensure that all documents in relation to the REIT (excluding documents

containing commercially sensitive information) are made available for
inspection by the shareholders and creditors of the REIT in the
Philippines, during normal office hours, at the place of business of the
REIT and ensure that copies of such documents are available upon
request by any shareholder or creditor upon payment of a reasonable
fee;

j. ensure compliance with any applicable laws, rules, codes or guidelines

issued by governmental departments, regulatory bodies, exchanges or
any other relevant organizations regarding the activities of the REIT or its
administration; and

k. maintain and implement investor relations procedures whether online

or otherwise to handle queries and complaints.

In no case shall the REIT perform quasi-banking functions without the

requisite license issued by the BSP.
Capitalization
A REIT must have a minimum paid - up capital of Three hundred million
pesos (Php300, 000.000.00).

Allowable Investments
A REIT may only invest in:

1. Real estate.

a. A REIT may invest in real estate located in the Philippines, whether

freehold or lease hold. At least seventy-five percent (75%) of the
Deposited Property of the REIT shall be invested in, or consist of,
income generating real estate. Deposited Property that should be
invested in Income-generating Real Estate located in the Philippines
shall in no case be less than 35% of the Deposited Property.

b. A REIT may invest in income generating real estate located outside

of the Philippines; Provided, that such investment does not exceed
forty percent (40%) of its Deposited Property and only upon special
authority from the Commission. The Commission in issuing such
authority shall consider, among others, satisfactory proof that the
valuation of assets is fair and reasonable.

c. An investment in real estate may be by way of direct ownership or a

shareholding in a domestic special purpose vehicle constituted to
hold/own real estate, subject to the conditions provided under these
Rules.

d. Acquisition of a real estate shall include the ownership of all rights,

interests and benefits related to the ownership of the real estate.

e. The real estate to be acquired by the REIT should have a good

track record for three 3 years from date of acquisition.

2. Real estate-related assets, wherever the issuers, assets, or securities

are incorporated, located, issued, or traded.

3. Evidence of indebtedness of the Republic of the Philippines and other

evidence of indebtedness or obligations, the servicing and repayment of
which are fully guaranteed by the Republic of the Philippines, such as,
but not limited to, treasury bills, fixed rate treasury notes, retail treasury
bonds, (denominated either in Philippine or in foreign currency) and
foreign currency linked notes.

4. Bonds and other evidence of indebtedness issued by:

 a. the government of any foreign country with which the Philippines
maintains diplomatic relations, with a credit rating obtained from a
reputable credit rating agency or a credit rating agency acceptable to
the Commission that is at least two (2) notches higher than that of
ROP bonds; and

b. supranationals (or international organizations whose membership

transcends national boundaries or interests, e.g. International Bank
for Reconstruction and Development, Asian Development Bank).

5. Corporate bonds of non-property privately-owned domestic

corporations duly registered with the Commission with a current credit
rating of at least "A" by an accredited Philippine rating agency.

[Link] bonds of a foreign non-property corporation registered in

another country provided that the said bonds are duly registered with the
Commission and the foreign country grants reciprocal rights to Filipinos.

7. Commercial papers duly registered with the Commission with a current

investment grade credit rating based on the rating scale of an accredited
Philippine rating agency at the time of investment.

8. Equities of a non-property company listed in a local or foreign stock

exchange, provided that these stocks shall be issued by companies that
are financially stable, actively traded, possess good track record of
growth and have declared dividends for the past three (3) years.

9. Cash and Cash Equivalent Items.

10. Collective investment schemes duly registered with the Commission

or organized pursuant to the rules and regulations of the BSP; provided
however that: (i) the collective investment schemes must have a track
record of performance at par with or above the median performance of
pooled funds in the same category as appearing in the prescribed weekly
publication of the Net Asset Value Per Unit of the Collective Investment
Scheme units; and (ii) new collective investment schemes may be
allowed provided that its fund manager has at least a three (3) year track
record in managing pooled funds.

11. Offshore mutual funds with ratings acceptable to the Commission.

12. Investments of the REIT shall be recognized and measured in its

financial statements in accordance with the requirements of the PFRS
and the applicable interpretations or any amendments thereto, as follows:

a. Investment Property (PAS 40 and related standards);

b. Financial Assets (PAS 39, PFRS 7 and related standards);

c. Investments in Associates (PAS 28);

 d. Investments in Subsidiaries (PAS 27);

e. Interests in Joint Ventures (PAS 31);

f. Non-current Assets Held for Sale and Discontinued Operations

(PFRS 5);

g. Leases (PAS 17).

13. Synthetic Investment Products, provided that: (i) Synthetic Investment

Products shall not constitute more than five percent (5%) of the Investible
Funds of the REIT, (ii) the REIT shall avail of such Synthetic Investment
Products solely for the purpose of hedging risk exposures of the existing
investments of the REIT; (iii) the Synthetic Investment Products shall be
accounted for in accordance with PFRS; (iv) the Synthetic Investment
Products shall be issued by authorized banks or non-bank financial
institutions in accordance with the rules and regulations of the BSP
and/or the SEC; and (iv) the use of Synthetic Investment Products shall
be disclosed in the REIT Plan and under special authority from the SEC.

Income - generating Real Estate

At least seventy - five percent (75%) of the deposited property of the REIT
must be invested in, or consist of, income - generating real estate.

Property Development
A REIT shall not undertake property development activities whether on its
own, in a joint venture with others, or by investing in unlisted property
development companies, unless: (i) it intends to hold in fee simple the
developed property for at least three (3) years from date of completion ; (ii)
the purchase agreement of the said property is made subject to the
completion of the building with proper cover for construction risks; (iii) the
development/construction of real state shall be carried out of terms which the
best available for the REIT and which are no less favorable to the REIT than
an arm's length transaction between independent parties; and (iv) the
prospects for the real estate upon completion can be reasonably expected to
be favorable.

The total contract value of property development activities undertaken and

investments in uncompleted property developments should not exceed ten
percent (10%) of the Deposited Property of REIT.

Leasehold Property
Where a leasehold property is acquired, the consent of the regulatory
authority to transfer the lease shall be obtained. The lease shall be registered
lease.

Encumbrances
Unless otherwise disclosed, all real estate shall be free from all
encumbrances at the time of acquisition, except for charges entered by
financial institutions in relation to loan facilities extended for the construction
or acquisition, except for charges entered by financial institutions in relation
to loan facilities extended for the construction or acquisition of the real estate.

Insurance
All real estate acquired by REIT shall be insured for their full replacement
value, including loss of rental, where appropriate, with insurance companies
approved by the Fund Manager.

Single Entity Limit

Not more than fifteen percent (15%) of the Investible Funds of the REIT may
be invested any one issuer's securities or any one managed fund, except with
respect to the Philippine government securities where the limit is twenty -five
percent (25%).

Foreign Assets
A REIT may invest in local or foreign assets, subject to the terms of its
Constitutive Documents and specific provisions of these Rules. Where an
Investment in a foreign real estate asset is made, the REIT should ensure
that the investment complies with all the applicable laws and requirements in
that foreign country, such as , but not limited to foreign ownership restrictions,
if any, and requisites of having good and valid title to the real estate.1avvphi1

Aggregate Leverage Limit

The total borrowing and deferred payments of a REIT should not exceed
thirty five percent (35%) of its Deposited Property; Provided, however, that
the total borrowings and deferred payments of a REIT that has a publicity
disclosed investment grade credit rating by a duly accredited or
internationally recognized rating agency may exceed thirty-five percent (35%)
but not more than seventy percent(70%) of its Deposited Property. Provided,
further that in no case shall a Fund Manager, borrow for the REIT from any of
the funds under its management.

Related Party Transactions

Any contract or amendment thereto, between the REIT and Related Parties,
including contracts for services, shall comply with the following minimum
requirements:

a. Full, fair, timely and accurate disclosures on the identity of the parties,
their relationship with the REIT, and other important terms and conditions
of the transaction have been made to the Exchange and the Commission;

b. Be on fair reasonable terms, including the contract price;

c. Approved by at least a majority of the entire membership of the board

directors, including the unanimous vote of all independent directors of the
REIT;
 d. Accompanied by a fairness opinion by an independent appraiser done
in accordance with the valuation methodology prescribed by the
Commission, in the case of an acquisition or disposition of real estate
assets and property or share swaps or similar transactions; and

e. Any other matter that may be materially relevant to a prospective

investor in deciding whether or not to invest in the REIT.

Valuation
A full valuation of a REIT's assets shall be conducted by an independent
Property Valuer, duly accredited by the Commission, at least once a year. NO
valuer shall value the same REIT for more than three (3) consecutive years.
Subject to a curing period of three (3) years, the REIT may, however, re-
engage the services of said property valuer. The Valuation Report, including
the standards of asset valuation and valuation methodology shall be
disclosed in the Annual Report of the REIT.

Records
All procedures and processes followed, and decisions made in relation to
whether or not to invest in a particular property shall be fully, property and
clearly documented by the REIT, the Fund Manager and Property Manager,
as may be applicable.

Single Entity Limit

Not more than fifteen percent (15%) of investible funds of the REIT may be
invested in any one issuer's securities or anyone managed fund, except with
respect to government securities where the limit is twenty - five percent
(25%).

Foreign Assets
A REIT may invest in local or foreign, assets, subject to the terms of its
articles of incorporation. Where an investment in a foreign real estate asset is
made, the REIT should ensure that the investment complies with all the
applicable laws and requirements in that foreign country such as, but not
limited to, foreign ownership restrictions, if any, and requisites of having good
and valid title to that real estate.

Joint Venture
When investing in real estate as a joint owner, the REIT should make such
investment by acquiring shares or interests in an unlisted special purpose
vehicle constituted to hold/own the real estate and the REIT should have
freedom to dispose of such investment. The joint venture agreement,
memorandum and articles of association or other constitutive documents of
the special purpose vehicle should provide for a minimum percentage of
distributable profits of the special purpose vehicle that will be distributed and
grant the REIT veto rights over key operational issues of the special purpose
vehicle.

Fund Manager
A REIT must appoint a fund manager that is independent from the REIT and
its sponsor(s)/ promoter(s) and shall be subject to the following minimum
requirements:

i. It must be a corporation duly organize under the laws of the Republic

of the Philippines or a foreign corporation engaged in the business' of
fund management with proven track record and duly licensed to do
business in the Philippines by the appropriate regulatory agency;

ii. It must have a minimum paid - up capital" stock or assigned capital of

Ten million pesos (Php10, 000.000.00), unless the Commission
provides otherwise;

iii. Its office in the Philippines must have a meaningful role in its
business activities and must perform accounting, compliance and
investor relations, services in the Philippines;

iv. It must comply with the requirements of the relevant law or

appropriate regulatory authority on the number of independent directors;

v. It must comply with the corporate, governance requirements,

including the fit and proper rule, prescribed by this Act and its IRR;

vi. It must adopt measures as may be prescribed by the IRR of this Act
to avoid conflicts of interest in the discharge of its duties as fund
manager for the REIT; and

vii. It must employ a resident chief executive officer and at least two (2)
full - time professional employees who have a track record' and
experience in financial management as well as experience in the real
estate industry.

REIT Property Manager

The RElT must appoint a REIT property manager who shall be responsible
for managing the real estate assets such as apartment buildings, office
buildings, warehouses, hospital buildings" medical facilities, hotel buildings,
resort facilities, manufacturing plants and other physical assets of the REIT.
The contract between the REIT and the property manager must comply with
the disclosure and other requirements prescribed for related party
transactions.

The REIT property manager shall be independent from the REIT and its
sponsor/promoter and possess the qualifications and be subject to such
functions and responsibilities, restrictions and other requirements prescribed
by the Commission.

The property manager must comply with the following minimum qualifications:

i. It must comply with the requirement of the SRC or the Commission on

the number of independent directors;
 ii. It must comply with the corporate governance requirements, including
the fit and proper rule, prescribed by this Act and its IRR; and

iii. It must adopt measures as may be prescribed by the IRR of this Act to
avoid conflicts of interest in the discharge of its duties as property
manager for the REIT.

Independent Directors
At least one - third (1/3) of the board of directors of a REIT must be
independent directors.

Taxes
Creditable Withholding Tax
Income payments to a REIT shall be subject to a lower creditable withholding
tax of one percent (1%).

VAT on Gross Sales or Gross Receipts of RElTs. - A REIT shall be subject to

value - added tax (VAT) imposed under Title IV of the National Internal
Revenue Code of 1997, as amended, on its gross sales from any disposal of
real property, and on its gross receipts from the rental of such real property.
A REIT shall not be considered as a dealer in securities and shall not be
subject to VAT on its sale, exchange or transfer of securities forming' part of
its real estate - related assets.

Transfer of Real Property

Any existing, law to the contrary notwithstanding, the sale or transfer of real
property to REITs, which includes the sale or transfer of any and all security
interest thereto, shall be subject to fifty percent (50%) of the applicable
Documentary Stamp Tax (DST) imposed under Title VII of the National
Internal Revenue Code of 1997, as amended.

All applicable registration and annotation fees to be paid, related or incidental

to the transfer of assets or the security interest thereto, shall be fifty percent
(50%) 'of the' applicable registration and annotation fees.

The incentives granted under this section can be availed of by an unlisted

REIT, provided it is listed with an Exchange not later than two (2) years from
the date of the initial availment of the incentives.

The fifty percent (50%) of the applicable DST shall nevertheless be due and
demandable together with the applicable surcharge, penalties, and interest
thereon reckoned from the date such taxes should have been paid upon the
occurrence of any of the following events subject to such curing period as
may be prescribed in the IRR of this Act:

i. Failure to list with an Exchange within the period prescribed in this section;
 ii. Failure to maintain its status as a public company as defined in Section
8.1 of this Act;

iii. Failure to maintain the listed status of the investor securities on the
Exchange and the registration of the investor securities by the Commission;
and/or

iv. Failure to distribute at least ninety percent (90%) of its distributable

income required under Section 7 of this Act.

Dividends Paid by REITs

Cash or property dividends paid by a REIT shall be subject to a final tax of
ten percent (10%), unless: (a) the dividends are received by a nonresident
alien individual or a nonresident foreign corporation entitled to claim a
preferential withholding tax rate of less than ten percent (10%) pursuant to an
applicable tax treaty; or (b) the dividends are received by a domestic
corporation or resident foreign corporation, or an overseas Filipino investor in
which case, they are exempt from income tax or any withholding tax:
Provided, That in the case of overseas Filipino investors, they are exempt
from the dividends tax for seven (7) years from the effectivity of the tax
regulations implementing this Act.