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Despite the obstacles posed by the coronavirus outbreak, Singapore continue to fortify its status as a real estate investment trust (REIT) hub.
Despite the obstacles posed by the coronavirus outbreak, Singapore continue to fortify its status as a real estate investment trust (REIT) hub, with foreign-currency REIT listings making a strong start this year.
UK-focused Elite Commercial REIT made its debut in Singapore last week, bringing the total number of foreign-currency-denominated REITs already traded in the city-state to six, showed Bloomberg data.
United Hampshire US REIT has also started gauging investors’ demand for Singapore initial public offering (IPO) which could raise $300 million to $400 million.
Bloomberg reported that the city-state has more foreign-currency REIT listings compared to any market in the world. London, Dubai and Canada only have two, Hong Kong has one, and none for the US. This comes as Singapore’s well-tested legal system and favourable tax rate make it especially appealing.
And given the low interest rate environment, REITs have been popular among yield-hungry investors. In fact, the FTSE Straits Times Real Estate Investment Trust Index hit a 12-year high last month.
Last week, Elite Commercial REIT raised $170.5 million in what was the city-state’s first trust listing for 2020 and its first ever British pound-denominated IPO. Singapore exchange data indicated that the REIT’s institutional tranche was oversubscribed by 3.2 times, while its retail trance by 8.3 times.
The sector, however, was not immune from the consequences of the coronavirus outbreak, which claimed the lives of over 900 individuals and saw the city-state push its disease response level to Orange, which is similar to the level raised during SARS.
Singapore’s trusts with exposure to China witnessed a drop in market value on the back of concerns over potential business disruptions due to the virus outbreak.
The effects of the outbreak have also trickled to IPOs, with Trans-cab Services Pte., Singapore’s second-biggest taxi firm, postponing its initial share sale.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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