MAS refines proposals to strengthen REIT market

The Monetary Authority of Singapore (MAS) has refined its proposals to strengthen the real estate investment trust (REIT) market, following feedback from industry participants.

The changes, which will be phased in to facilitate smooth implementation by the industry, include capping borrowings to 45 percent of the REITs’ total assets, MAS said on Thursday (Jul 2). Currently, the cap on borrowing is 35 per cent of total assets for REITs that are not rated, and 60 per cent for REITs with credit ratings.

Another proposal will make it easier for REITs to rejuvenate their portfolios, by raising the development limit from 10 per cent to 25 per cent.

MAS will also introduce rules to strengthen corporate governance and increasing transparency. These include a requirement that at least half of the REIT manager’s board of directors are independent, if unitholders do not have the right to appoint the directors.

Singapore’s REIT market is one of the largest in Asia, with a total market capitalisation of about S$67 billion.

Source : Channel NewsAsia – 2 Jul 2015

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