S-REITs: Real Estate Investment Trusts Listed in Singapore
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The first Real Estate Investment Trust in Singapore, known as S-REIT, was CapitaMall Trust in 2002. They're regulated as Collective Investment Schemes or Business Trusts under the Monetary Authority of Singapore's Code on Collective Investment Schemes, and are structured as unit trusts. They're called an S-REIT to distinquish them from other countries.
The manager of an S-REIT should be a corporation with a physical location in Singapore and a capitalization of at least $1 million (Singapore dollars). REIT trustees must be approved by the Monetary Authority of Singapore. At least 25% of their units must be held by at least 500 public shareowners.
The Singapore government is hoping to make it a major Asian Real Estate Investments Trusts, including cross-border REITs. Foreign S-REIT investors are subject to only 10% withholding on their dividends. When an S-REIT buys a building in Singapore, it's not subject to stamp duty.
Many S-REITs invest in property outside of Singapore. As of June 2007, 21% of S-REIT property value was in real estate outside of Singapore - in a total of ten other countries. This is relatively high. In many countries, the REIT laws encourage these property companies to invest within their own country. However, while Singapore is a major city it's a very small country, so it may not want REITs bidding up real estate property values when bargains are available in other places.
S-REITs are Legal Trusts
Singapore is the only REIT country in the world having REITs pay unit holders 100% of cash flows. In the United States and most other countries, it's 90%.
The structure of S-REITs reminds me of Master Limited Partnerships in the United States. That's because they are externally managed by a company which is a wholly owned subsidiary of a real estate corporation. This leads me to conclude S-REITs give these corporations a business structure for a large tax break.
In 2007 they passed legislation enacted by Monetary Authority of Singapore (MAS) which enhances disclosure on short-term yield enhancing arrangements - financial engineering. It discourages arrangements to entrench a manager's position and disallows discounts to institutional investors at IPO. It also increases the minimum threshold for investment in real estate -- an S-REIT must have at least 75% of its assets in income-producing real estate.
And no more than 10% of a REIT's revenue can come from nonrental income.
Singapore's Securities Industry Council (SIC) extended the takeover and merger code to make it easier for one REIT to buy up another.
S-REITs are sector specific, focusing on retail, office, industrial, hotels, residental and medical properties.
- The Asian Public Real Estate Association or APREA -- represents the interests of both public and private real estate companies in the Asia Pacific region, and is based in Singapore.
- CapitaMall Trust -- one of the largest S-REITs in Singapore, and the second listed on the exchange
- CapitaCommercial Trust -- one of the largest S-REITs in Singapore, the 2nd ever listed on their stock exchange
- CapitaRetail China Trust -- the first public REIT in Singapore to hold a property portfolio exclusively of retail shopping malls in China
- Starhill Global Trust -- buying properties all around Asia
- Ascendas Real Estate Investment Trust -- first space and logistics S-REIT in Singapore.
- Ascendas India Trust -- this is a trust which owns industrial parks in some areas of India
- Mapletree Logistics Trust -- space and logistics properties in Singapore, Malaysia, Vietnam, Japan, Hong Kong, China and Korea.
- Sabana REIT -- world's largest sharia-compliant REIT, launched in 2010.
- Ascott Residence Trust -- owner-operator of serviced residences in twelve countries of Asia and Europe.
- Suntec REIT -- owns offices and retail space in Singapore.
- Cambridge Industrial Trust -- owns over 40 industrial properties in Singapore.
- ParkWayLife REIT -- owns 3 hospitals in Singapore and 39 nursing homes in Japan.
- First REIT -- owns hospitals and nursing homes mainly in Indonesia.
- AIMS AMP Capital Industrial REIT -- owns hospitals and nursing homes mainly in Indonesia.
- Fraser's Commercial Trust -- owns high end office buildings in Singapore, Japan and Australia.
- Lippo-Mapletree Indonesia Retail Trust -- invests in shopping malls in Indonesia.
- CDL Hospitality Trusts -- owns hotels, mainly in Singapore.
- SaizenREIT -- owns many residential properties in Japan.
- Fortune REIT -- owns 14 shopping malls in Hong Kong.
- Cache Logistics Trust -- owns 8 warehouses in Singapore.
- IndiaBulls Properties Investment Trust -- owns commercial and residential properties in Mumbai India.
- K-REIT Asia -- owns quality retail and office properties in Singapore and Australia.
- Global Logistics Properties -- many logistics properties in China and Japan.
Therefore, S-REITs (Singapore Real Estate Investment Trusts) are a great way to profit from economic activity in much of Asia.
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