Valuation reporting guide for listed companies, Reits and IPOs launched

A valuation reporting guide for listed companies, real estate investment trusts (Reits) and initial public offerings was launched on Monday by the Singapore Institute of Surveyors and Valuers (SISV).

This is the result of a collaboration with the Singapore Exchange (SGX) to jointly review valuation practices and the reporting carried out by real estate valuers that are engaged by listed issuers.

"This guide is aimed at meeting investors' need for clarity and completeness of information," said Tan Boon Gin, CEO of Singapore Exchange Regulation. "We encourage listed companies to use this guide as quality disclosures on matters such as valuations are crucial to their investors." 

He was speaking at the inaugural IVSC-WAVO Global Valuation conference, a joint event organised by the International Valuation Standards Council and World Association of Valuation Organisations.

The guide, which is aligned with global standards, is to be adopted for valuation reporting for asset classes spanning office, retail, industrial, hotel, hospitality and development sites.

It sets the minimum requirements for valuation reporting and the documents to be included in prospectus and circulars. The guide is, however, not a disclosure requirement under SGX's listing rules.  

SISV president of valuation and general practice Lim Lan Yuan said: "The enhanced requirements, together with the other information in the listings, is critical in safeguarding investors' interest when investments are made in these Reits and IPOs. 

"SGX will soon announce to all listed corporates and Reits to comply with the requirements stated in the Guide," Dr Lim said. "These two guides will be included as supplements to our existing SISV Valuation Standards and Practice Guidelines which have been updated to take account of the International Valuation Standards 2017."

As full valuation reports are typically vested with the sponsors and/or manager, summary letter and valuation certificate are the two types of documents that should be contained within the prospectus and circulars.

Speaking at the conference, Amy Khor, Senior Minister of State for the Environment and Water Resources, lauded the positive developments taking place in the valuation landscape, including the development of effective guidelines.

The market capitalisation of S-Reits has grown to more than S$80 billion. "The need for valuation work is expected to grow as new and fast-developing markets bring new investment opportunities," she said.