Debate over Reit governance not over yet

Singapore

PROPOSALS by the central bank to strengthen the rules governing Singapore real estate investment trusts (S-Reits) and Reit managers will go some way to mitigate the "agency problem" seen in these Reits.

But with the Monetary Authority of Singapore (MAS) stopping short of taking a stand on whether Reits should be internally or externally managed, the debate over Reit governance is unlikely to go away soon.

Some industry players believe that Singapore should eventually go the way of the United States where most Reits are now internally managed, though this structure is not without its disadvantages.

S-Reits, like most listed Reits in Asia Pacific with the exception of The Link Reit in Hong Kong and the…