Culture shift needed to curb controlling shareholders’ ‘long shadow’, boost investor confidence

[SINGAPORE] Twenty-one years ago this month, Ho Ching gave a speech that set the Singapore real estate investment trust (S-Reit) sector aflutter.

At an event marking the listing of Mapletree Logistics Trust (MLT) on Jul 28 2005, the then-chief executive of Temasek warned of “irresponsible or incompetent” S-Reit managers possibly acquiring assets at inflated prices, supported by unsustainable rents from “financially troubled or desperate” vendors.

She also brought up the risk of S-Reit managers attempting to circumvent investment hurdles when they acquired assets by deferring the issue of new units. “Such charades shore up short-term performance indicators at the expense of longer-term pain.”