,Singapore

What does the Jubilee Budget mean for Singapore REITs?

Will REITs take a hit as the stamp duty remission lapses?

The REIT sector breathed a little sigh of relief after Deputy Prime Minister Tharman Shanmugaratnam unveiled the government’s plans for Singapore-listed REITs in yesterday’s budget.

Income tax concessions for overseas properties were extended for another five years, the stamp duty remission for Singapore properties will be allowed to lapse after March 31 2015.

Analysts concur that the removal of stamp duty remissions will have limited impact on the REIT sector as a whole, but will have considerable effect on Singapore-focused REITs.

“For REITs investing in overseas properties, the extension of the income tax and GST concessions for another five years would facilitate more overseas acquisitions and encourage the listing of cross-border REITs on the Singapore Exchange. However, the withdrawal of the stamp duty remission, which will expire on 31 March 2015, will make it more challenging for Singapore-focused REITs to grow their portfolios,” said Lim Gek Khim, Partner, Tax Services, Ernst & Young Solutions LLP says

Christine Li, Director of Research at Cushman & Wakefield, added that newly established REITs in the industrial segment will be particularly affected, as they might have to be less aggressive in acquiring local properties.

“However, we believe that 3% is still considered marginal as the decision for Reits to buy properties still boils down to finding the right assets,” Li said.

The expiration of this policy will naturally lead to higher acquisition costs for REITs looking to invest in Singapore properties.

“The lapse of stamp duty concessions for REITs will pose another barrier amongst the already comprehensive checklist for the acquisition of properties by S-REITs. Generally, this works out to about a 3% increase in acquisition costs.” said Desmond Sim, Head, CBRE Research, Singapore & South East Asia.

Sim added that S-REITs transacted $3.2 billion in investment sales in 2014, or 19% of the total investment tally for the past year. With this lapse in the stamp duty concession, CBRE expects the volume of REITs acquisitions to be under pressure. 

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Meanwhile, a record 583 non-landed homes sold for more than $2m each in the first nine months of the year.
The merger will create a flagship pan-Asia logistics and high-tech S-REIT.
It is followed closely by the identification app SingPass.
The index tracks REITs in the APAC region with higher dividend yields and positive environmental attributes.
Both companies will create training programs to support digital entrepreneurship and digital upskilling for Grab partners.
The deal is focused on M1’s network assets. 
This is a part of the Lion City's bid to become a global maritime knowledge and innovation hub.
Risks, however, are present with the financial troubles faced by the real estate sector in China. 
This comes as more Singaporeans turn to gaming in the midst of the pandemic. 
Retail sector has experienced the “most disruptions” with the changing restrictions.
The company was commended for being a global and regional sector leader in five categories.
The CEO designate said he aims to drive development in the company’s business units.   Gary Ho,  who played an instrumental role in the Initial Public Offering (IPO) of Nanofilm Technologies International Limited, has been appointed Chief Executive Officer of the company.
Analysts said strong leasing activity in Q3 played a factor.
Islandwide prime retail rents saw a dip by 0.6% q-o-q. 
Jardine Cycle & Carriage, Keppel Corporation and Frasers Logistics & Commercial showed the most growth.