Singapore Exchange is an internationally recognized REIT hub
In 2019, Singapore locked in its position as the global REIT hub: 44% of REIT IPOs worldwide debuted on the Singapore Exchange (SGX), more than anywhere else. Over 80% of Singapore REITs (S-REITs) hold overseas assets, including US and UK office, retail and hospitality properties. Although Singapore’s REIT market is one of the world’s youngest across major markets, it is Asia Pacific’s fastest growing REIT platform, starting from the first REIT listing on the SGX in 2002 (CapitaLand Mall Trust’s portfolio of 3 local malls with AUM of about S$900 million). By 2010 there were 22 S-REITs at a market cap of S$35 billion. Today Singapore is home to over 40 REITs & Property Trusts with a combined market cap of over S$100 billion. Over a nine year period the Singapore REIT (S-REIT) market cap increased by 220% since 2010 compared to just 133% for the developed APAC REIT market over the same period. S-REITs have grown at a CAGR of approximately 15% over the past 10 years.
S-REITS Expecting an uptick post COVID-19
As global real estate markets are severely impacted by COVID-19, short term predictions about S-REITs have been uncertain. However, beneath 2020’s black swan events are some powerful macro trends and strong foundations for future consolidation and restarted growth. Relief measures were rolled out by the Singapore government, these are helping S-REITs through the challenging business environment. Market disruption caused by the pandemic is also expected to accelerate the consolidation trend which was observed prior to the pandemic, with REITs seeking to achieve scale and greater visibility among investors through inclusion or higher weight in major indices. Global institutional investors such as asset management firms, sovereign wealth funds, insurance/lifers, private banks, family offices are actively participating in S-REITs.
With valuable support and input from Singapore Exchange (SGX), Clifford Chance Singapore and REIT Association of Singapore, our white paper explores the dynamics and future developments of this global REIT hub, highlighting recent consolidations, regulations and ESG requirements.