A group representing Asian property investors and developers has asked the Singapore government to step in, if necessary, to help real estate investment trusts (REITs) to refinance an estimated S$4 billion in debt due this year.
The Asia Pacific Real Estate Association (APREA) has written a background paper on the issue. It said that real estate is a capital-intensive business, but at present there is effectively no capital.
The group said that government assistance is needed to help restart the credit markets for commercial real estate mortgages.
The association’s chief executive, Peter Mitchell, cited moves taken by other governments such as Australia’s recent decision to create a US$2.6 billion crisis fund to support lending in the commercial property sector.
The association estimates that Singapore-listed property firms, including REITs, have about S$12 billion in loans and bonds that will become due before the end of this year.
The group’s other proposals to help Singapore-listed REITs include allowing a temporary tax waiver on undistributed earnings to help them conserve cash and for the central bank to accept real estate loans as collateral in repurchase agreements with banks.
Source : Channel NewsAsia – 4 Feb 2009