The Social Security System (SSS) said it is poised to enhance its income by strategically increasing its investments in real estate investment trusts (REITs) this year, a calculated move expected to yield better returns.
SSS president and chief executive officer Rolando Ledesma Macasaet said they are optimistic of generating more profit from its P6-billion investment in nearly all the REITs currently available in the Philippines.
Macasaet expressed optimism, stating that, of P6-B investment, more than 75 percent were purchased this year and yield was around eight percent. “This promising figure is expected to significantly boost the SSS investment portfolio, instilling a sense of optimism among stakeholders.”
His bullish outlook on REITs prospect is underpinned by the expected rate cut in the second half of the year and the increasingly favorable market conditions. This positive outlook sets the stage for potentially higher returns on SSS’ investments.
Investments Sector concurrent acting head Ernesto Francisco Jr., in a statement, said that SSS currently invests five percent of its equity funds in REITs and looks to further increase on opportunities.
“REIT is a fantastic investment structure for pension funds like SSS because 90 percent of the lease income is mandatorily distributed. The REIT sector also greatly contributes to economic development since REIT players must reinvest within one year,” Francisco said.
He predicted that REITs will be among the top contributors to this year’s investment income because they continue offering attractive dividend yields higher than the prevailing benchmark rates.
He said SSS will continue investing in REITs in the upcoming years because they can earn decently from steady rental income and growth. “The more robust and diversified the cash flow of the REITs asset, the more we will invest in them.” ||
