The Securities and Exchange Commission (SEC) has introduced new rules allowing real estate companies, including small developers, to raise funds through the capital markets.
The initiative, dubbed SEC RENT (Securing & Expanding Capital in Real Estate Investment Transactions), is designed to help real estate firms using rental pool agreements register their investment offers with the commission.
Rental pool agreements are investment contracts where property developers sell or offer units in projects like condominiums, hotels or resorts to the public, with buyers contributing their units to a rental pool managed by the company or a third-party operator.
“Given its scale and strategic importance, the real estate sector stands to benefit immensely from deeper participation in the capital market,” SEC commissioner McJill Bryant Fernandez said in a statement.
Fernandez noted that real estate contributed 5.6 percent to the gross domestic product in 2024 and is closely linked to other key industries such as construction, tourism and finance.
Under SEC RENT, the SEC’s Markets and Securities Regulation Department (MSRD) should complete its review of a company’s registration within 45 days. Before this, firms needed to obtain clearance from various SEC departments by submitting required forms and documents.
Once approved, real estate companies can offer investment opportunities to the public more quickly and efficiently. This move is expected to help both large and small property developers find new avenues for project funding.
The SEC launched the program in partnership with the Chamber of Real Estate & Builders’ Associations Inc. (CREBA), which represents over 4,000 members in the property sector.
“We probably look at securities offering and all these types of capital market sourcing as for the big players alone. Small companies like us traditionally resort into borrowings as source of funds to continue operating our businesses,” said CREBA vice president for housing affairs Demetrio Posadas.
“Our organization appreciates the efforts being extended by the SEC for now reaching out not only to big developers, but likewise for making us understand that we, small companies, probably have a chance to participate in this capital market,” he said.
