On the corporate governance of REITs

REAL estate investment trusts (REITs) are hot properties. According to the Asia Pacific Real Estate Association, REITs have outperformed the equity and bond markets as an asset class.

From 2011 to 2013, Asian REITs returned 8.2 per cent per annum (measured on the TR/GPR/APREA Composite REIT Index) against a lower equity return of 3.8 per cent (MSCI Asia Equities Index) and even lower bond returns of 2.4 per cent (JPM Government Bond Index). Over a longer 10-year period, Asian REITs also registered higher annual returns of 8.8 per cent compared to 7.6 per cent for equities and 6.3 per cent for bonds.

In Singapore, S-REITs chalked up a total of 13.7 per cent (FTSE ST REIT Ind…