“Our interest in being involved is that we are knowledgeable in this space and we can see an opportunity to expand outside Australia.” But an improvement in corporate governance was desirable, Atchison said. He has advised the government to steer clear of instruments such as stapled securities, which usually bind an LPT with a related property development company. Atchison also warned legislators of the threat of ‘regulatory arbitrage’: overseas investors buying Philippine assets and listing them on a foreign exchange.

“A jurisdiction will compete for business. Cross border REITs do exist and one day other countries will tap into the Philippines property market if it hasn’t made its own REITs.”

“If the Philippines don’t do something, international investors will find a way to buy its properties and list them in vehicles in Singapore, Hong Kong or Australia, which is not advantageous to the economy of the Philippines.” Since Filipinos “understand property more than companies,” a domestic LPT market could provide them with an entry point to the stockmarket, Atchison said.

A number of investment banks and property firms, such as UBS and CB Richard Ellis, are already active in the country. Vietnam and Indonesia are also considering whether to establish domestic LPT sectors.