What should Foreign Investors know about Singapore REITS? - Financial Alliance (2024)

Contributed by Kenny Loh, Associate Wealth Advisory Director, Financial Alliance Pte Ltd
(The contributor can be contacted at [email protected])

Singapore Real Estate Investment Trusts (REITs) are a popular investment vehicle for foreign investors looking to gain exposure to the Singapore property market. Singapore REITs are now into their 20^th anniversary since the first Singapore REIT was listed on Singapore Exchange in 2002. Currently, Singapore REITs account for S$100 billion in market capitalisation on the Singapore Exchange.

The following are some fun facts for Singapore REITs:

• REITs are listed on the Singapore Exchange (SGX) and are required to distribute at least 90% of their taxable income to investors as dividends in order to enjoy tax transparency treatment.
• REITs offer investors the opportunity to invest in a diversified portfolio of properties, including office buildings, shopping malls, warehouses, data centres, hospitals, hotels, student accommodation, etc.
• Singapore REITs are regulated by the Monetary Authority of Singapore (MAS) and are required to comply with various regulatory requirements, such as maintaining a certain level of liquidity and disclosing financial information on a regular basis.
• Singapore has a stable political and economic environment, which provides a high level of investor confidence and a strong currency.
• Foreign investors are able to invest in Singapore REITs without any restrictions and can enjoy tax benefits as well.
• Singapore REITs have a relatively high yield compared to other fixed income investments, making them an attractive option for income-focused investors.

Singapore REITs are suitable for income-seeking investors due to their relatively high distribution yield and the underlying real estate backing them. In addition, Singapore, being a highly regulated financial and wealth management hub and home to a strong currency in the Singapore Dollar, enables foreign investors to preserve their investment capital with a viable alternative in the form of Singapore REITs.

Kenny Loh is an Associate Wealth Advisory Directorand REITs Specialist. He helps clients construct diversified portfolios consisting of different asset classes from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to achieve an optimal risk adjusted return. Kenny is also a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and also regular invitee to speak at REITs Symposium, MoneyFM89.3 and The Business Times.