#1: Securitizing Real Estate in Asia: Is Singapore a Prelude of Things to Come? (1548 reads) 作者: 青青, 时间: 2004-10-29 周五, 18:55 — 作者：游客 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Singapore is emerging as a genuine player in the small but relatively sophisticated real estate finance market that is developing across Asia-Pacific. While capital markets in Japan and Hong Kong (and to a lesser extent, Australia) have played visible roles in real estate financing for many years, Singapore, with over US$1 billion in capital raised since 2002, is increasingly seen as a factor in the REIT and securitized real estate market arena.
Moreover, Singapore has many advantages, including location, availability of a skilled workforce, 'AAA' sovereign rating, and clear legal system. The marriage of these factors with relevant tax benefits is making Singapore the preferred location to list shares for many regional real estate owners.
Singapore's REIT-Friendly Framework Driving Sector's Growth
The framework for REITs established by the Singapore government and its relevant authorities, including the Monetary Authority of Singapore (MAS), seems to be driving growth in the region. This framework, which includes significant tax advantages for investors, has proved to be especially conducive to the establishment of local and offshore REITs in Singapore. Tax advantages include tax-free distributions from the REITs to investors, which is akin to the Australian structure; in addition, investors pay no personal income tax on those distributions.
As a result of the recent legislation, the Singapore market has launched four REITs in the past 24 months. These include CapitaMall Trust (Singapore retail malls), Ascendas Real Estate Investment Trust (A-REIT, Singapore industrial properties), Fortune REIT (which is a Singapore listing of a pool of retail assets located in Hong Kong), and most recently, CapitaCommercial Trust (Singapore commercial properties).
CapitaLand Ltd., one of Singapore's largest property owners/developers, sponsored the CapitaMall Trust and CapitaCommercial Trust transactions. CapitaLand Ltd. holds worldwide real estate assets in excess of US$10 billion. These CapitaLand-sponsored trusts are also using CMBS issuances both locally in Singapore and in the Euro markets to provide debt finance for many of their holdings. Diversifying investor and capital bases at competitive costs have proved popular for this trend-setting REIT and may inspire the formation of similar vehicles across Asia. Indeed, other Asian markets like Hong Kong are already promulgating their own new REIT legislation, though the current proposals in those markets are less attractive than Singapore's format.
REIT gearing in Singapore, regulated by the MAS, is limited to a cap of 35% of asset value, unless special provisions are satisfied to justify higher leverage levels. This cap on leverage coincides with equity investor demands for conservative gearing levels and, together with tightening bank credit lines for real estate debt finance, is propelling real estate owners to explore capital markets financing alternatives, including CMBS technology.
Varied Real Estate Practices Create Obstacles
Despite the growth seen in Singapore, obstacles to CMBS issuance and REIT formation remain throughout the region. Real estate markets and practices across Asia, which are extremely varied, suffer from inadequate levels of transparency and governance. Valuation methodologies, disclosure levels, and reporting frameworks are all below international standards and must improve to attract international recognition and capital.
The Singapore office sector illustrates some of these challenges. In a market traditionally dominated by strict supply limitations and institutional owners with a "hold" mentality focused only on long-term capital appreciation, a dearth of trades and public information makes it very difficult to accurately assess current market values. Despite limited recent market evidence, it is clear that many of these owners continue to carry their assets at book values significantly above current realizable market values.
While the analysis and listing of these vehicles can be challenging, successful results are achievable. Witness the recent listing of the units of CapitaCommercial Trust on the SGX, as well as the oversubscribed and well-priced CMBS issuance that followed. Backed by mortgages on four office properties in Singapore, the CMBS offering was placed into the Euro market, where investors have shown a high demand for exposure to this Asian market.
These two offerings demonstrate that the interests of vendors, issuers, and investors alike can be met. Other Government Linked Corporations (GLC) hold a significant amount of property in Singapore; these GLCs can be expected to tap the REIT market following CapitaLand's success.
Asian Investors Score Many Benefits With REITs, CMBS
Based on MAS guidelines regarding banks' exposure to real estate, Standard & Poor's Ratings Services expects to see additional REITs established to hold bank-owned real estate portfolios. Furthermore, as balance-sheet risk gains more serious attention from the regulators in Singapore, market watchers should expect to see more bank-issued CMBS either through true sale securitizations or synthetic transactions to provide for closer balance sheet and risk management of real estate-backed loans.
The private real estate sector has yet to see any real estate securitizations. However, Standard & Poor's expects to see more privately held real estate securitized directly, or for this real estate to move across to listed REITs in Singapore to access the tax advantages available to REIT investors. These tax advantages may, in some circumstances, assist with transferring assets to these vehicles without suffering significant adverse effects in terms of transfer and carrying value.
Will Asia-Pacific Take Singapore's Cue on Real Estate Finance?
Singapore has emerged as an inviting market for local and regional REITs and CMBS issuers. The rigors of the international capital markets, and the demands of international investors and local regulators, will continue to drive the market toward international valuation, governance, and transparency standards. All of these factors should help ensure that a robust marketplace continues to develop, providing ever-greater opportunities for both the issuer/owner and investment community. The question is whether these developments will flow out of Singapore to other Asian markets.
