VistaREIT denies unpaid rent claims, dividends unaffected

VistaREIT Inc. (VREIT), the real estate investment trust (REIT) of tycoon Manuel Villar Jr., issued a clarification on Tuesday following reports alleging that several Villar Group companies owed billions of pesos in rent to the listed REIT.

In a statement to the Philippine Stock Exchange dated 10 October, VistaREIT explained that the majority of its receivables relate to future rental escalations that are not yet due, and will only be billed in accordance with the escalation terms of its lease contracts.

“The majority of the Company’s receivables pertain to future rental escalations. These amounts are not yet due and will only be billed upon the application of the relevant escalation rates, in accordance with the terms of our lease agreements,” said VistaREIT Chief Financial Officer and Investor Relations Head Melissa Camille Z. Domingo.

A REIT is a listed company that owns and manages income-generating properties such as malls, offices, and hotels, and distributes most of its profits as dividends to investors. While REITs are valued for providing steady income streams, their performance depends heavily on rental income and collection efficiency.

VistaREIT clarified that, under Philippine Accounting Standards (PAS) 17, rental income is recognized on a straight-line basis over the lease term, which includes future escalation amounts. This accounting treatment creates what the company called a “timing difference” between revenue recognition and actual cash collection, but it does not affect the REIT’s distributable income or dividend capacity.

“These accounting treatments do not affect the Company’s distributable income or its ability to pay dividends,” Domingo said, adding that receivables related to future rental escalations and fair value gains or losses are excluded from dividend calculations.

The company further emphasized that its billed receivables demonstrate “consistent collection performance,” supported by close coordination between its credit team and tenants to ensure timely payments.

“The opinion or assessment of persons not affiliated with the Company and not privy to its operations should not be considered as a conclusive assessment of the financial condition of the Company,” Domingo added.

VistaREIT underscored that it remains financially sound, noting that since its 2022 listing, its dividend payouts have continued to increase. For 2024, the firm declared and paid dividends 6.77 percent higher than in 2023, attributing the growth to “operational strength and prudent financial management.”

The clarification came after a report cited Abacus Securities’ analysis raising concerns about VREIT’s receivables, including amounts reportedly owed by Villar Group affiliates.

VistaREIT reiterated its commitment to “delivering value to shareholders” and said it is focused on strengthening its financial position amid ongoing scrutiny of related-party transactions within the REIT sector.

Launched in 2022, VistaREIT forms part of the Villar Group and holds a portfolio primarily composed of commercial centers and office properties leased to affiliates under Vista Land & Lifescapes Inc. The REIT raised nearly P5 billion during its initial public offering, positioning itself as a retail-focused property trust catering to the fast-growing communities developed by the Villar Group nationwide.