Manulife US Reit, Keppel-KBS US Reit announce changes in response to new US tax rules

THE managers of two Singapore-listed real estate investment trusts focused on US property on Tuesday announced that they have taken certain steps in reaction to recently announced changes to US tax rules.

One of the effects of the US Tax Act is that it impacts the deductibility of certain interest expense for taxable years beginning after Dec 31, 2017.

As a result, the managers of Keppel-KBS US Reit and Manulife US Reit have exercised the redemption of preferred shares within their respective sub US Reits.

The total redemption amount of the sub US Reits of Keppel-KBS US Reit is approximately US$1.6 million while the redemption amount for Manulife US Reit is approximately US$0.7 million. The moves were funded from internal resources, the Reits said.

With the changes, the Reits have also commenced the restructuring of their lending subsidiaries, with the Reits establishing directly and indirectly wholly-owned companies and a partnership in Barbados.