Property Fund Guidelines by MAS

MAS Issues Revised Property Fund Guidelines

Singapore, 28 September 2007...The Monetary Authority of Singapore (MAS) has issued revised Property Fund Guidelines (REIT Guidelines) (PDF, 332KB). The revised Guidelines are intended to improve safeguards for investors and to provide greater clarity and flexibility for commercial transactions. The Guidelines have also been rationalised to reduce compliance costs in a number of areas.

2. The changes include:

• Enhancing the disclosure requirements on the use of short-term yield-enhancing arrangements;
• Providing guidance on permissible fixed-term management contracts;
• Disallowing discounts to institutional investors for subscriptions made at the time of listing of a REIT;
• Specifying safeguards for REITs that intend to pay dividends in excess of current income;
• Requiring a REIT to invest at least 75% of its assets in income-producing real estate; and
• Removing the 5% single party limit for investments in real-estate related securities.

3. MAS will amend the Securities and Futures Act (SFA) to include REIT management as a regulated activity. The Securities and Futures (Licensing and Conduct of Business) Regulations and Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations will also be amended to set out the capital requirements and licence fees for REIT managers, as well as provide for a transitional period for existing industry participants.

4. In revising the REIT Guidelines, MAS considered feedback from its public consultation in March this year and held discussions with REIT players. Our responses to the comments received from the public consultation are published on the MAS website. (Click here to view) (PDF, 161KB) MAS will continue to engage industry players and ensure that our regulatory regime remains progressive and keeps pace with the market’s development and growth.

Notes to Editor:
The first Singapore REIT was launched and listed on the Singapore Exchange ("SGX") in July 2002. Singapore is now the largest REIT market in Asia ex-Japan, with 17 listed REITs and a total market capitalisation of more than S$26 billion. Singapore-listed REITs offer investors access to a diversity of real estate assets including retail malls, office buildings, industrial properties, hotels, serviced apartments and hospitals.