S’pore, Aussie rules on Reits “best in region”
THE STRAITS TIMES, THURSDAY, JUNE 26, 2014
By Rachel Boon
SINGAPORE'S regulatory regime for real estate investment trusts (Reits) is the second best in the region, trailing only Australia, according to a report released yesterday.
Regulatory certainty is important when investors consider Reit investments, said the report, commissioned by the Asia Pacific Real Estate Association (Aprea) and sponsored by Perpetual, an independent financial services group.
Australia rates the highest for regulatory certainty in the Asia-Pacific region, followed by Singapore. The other major regional regimes include Japan and Hong Kong.
This regulatory certainty and other favourable factors make these two markets the most preferred for Reit investors, stated the report.
Australia and Singapore were also seen as having the greatest level of market confidence and integrity when it came to "effective regulations of related party transaction".
Aprea chief executive Peter Mitchell said: "It (the study) emphasises the essential requirement of proper tax treatment- Reits are in essence a vehicle to enable property to be traded publicly as well as directly.
"For this to work, there has to be the same tax treatment for both and that's one reason institutional investors are particularly attracted to the Reit markets of Australia and Singapore".
THE ATTRACTION
It (the study) emphasises the essential requirement of proper tax treatment- Reits are in essence a vehicle to enable property to be traded publicly as well as directly. For this to work, there has to be the same tax treatment for both and that's one reason institutional investors are particularly attracted to the Reit markets of Australia and Singapore.
- Aprea CEO Peter Mitchell
Mr Andrew Cannane, Perpetual's general manager of corporate client services, said it was no surprise that Australia and Singapore came out on top.
He cited "their strong regulatory framework, reporting, valuation guidelines and governance in relation to related party transactions".
The study is said to be the first survey of regulatory and tax regimes of Reits in the region.
It focuses on factors including Reit structure, the nature of operations, capital management and investor reporting.
Mr Cannane added that the results support "our commitment to providing independent fiduciary services in both of these markets where we expect to see continued growth in the years ahead".