THE Monetary Authority of Singapore (MAS) on Thursday published a consultation paper containing a set of proposals to strengthen Singapore's real estate investment trust (Reit) market.
"The proposals will enhance the transparency and corporate governance of the Reit market," it said.
The key proposals are:
1) The Reit manager and its directors will have the statutory duty to prioritise the interests of the Reit investors over those of the Reit managers and its shareholders in the event of a conflict of interest.
2) The board of a Reit manager will have a stronger independent element to enhance its objectivity.
3) Reit managers' performance fees will be computed based on a methodology that primarily takes into account the long-term interests of the Reit investors.
4) The development limit of a Reit will be increased from 10 per cent to 25 per cent of its deposited property.
5) The leverage limit imposed on Reits will be increased from 35 per cent to 45 per cent of the Reit's total assets; the provision for Reits with credit ratings to leverage up to 60 per cent will be removed. This will give the Reits more operational flexibility to rejuvenate their maturing portfolio of assets.
6) The Reit manager will provide more comprehensive disclosure to investors by including in annual reports items such as the amount of income-support payments received by the Reit; more information will also be released on the lease expiry profile, the refinancing needs of the Reit and on the remuneration policy for its directors and executive officers, as well as their remuneration.
The consultation paper is available on MAS website, and comments should reach MAS by Nov 10, 2014.