REITs on the Move

A listed REIT is a vehicle for investment in a portfolio of real estate assets, usually established with a view to generating income for unit holders. REITs assets are professionally managed, and revenues generated from assets (primarily rental income) are normally distributed to you, as a unit holder at regular intervals. Units of listed REITs are bought and sold like other securities listed on SGX at market-driven prices.

- Portfolio Diversification REITs typically own multi-property portfolios with diversified tenant pools, which reduce the risks of reliance on a single property and tenant in the case of directly owning a real estate asset.

- Income Distribution REITs normally have regular cash flows since in most cases, most of the revenues are derived from rental payments under contractually-binding lease agreements with specific tenure.

- Participation in the Property Market Most REITs are structured around large properties. With REITs, you can own stakes in such properties.

- Professional Management REITs allow investors the opportunity to buy into properties managed by professional property management companies.

You need to have the following accounts:

- A securities account maintained with the Central Depository (Pte) Limited (“CDP”) or a sub-account maintained with a CDP Depository Agent; and

- A trading account maintained with a SGX Securities Trading Member Company.

REITs listed on SGX market may be purchased on margin, and on terms similar to those for other securities traded on SGX.

Returns vary for different REITs. A REIT typically distributes dividends regularly based on income generated by the properties in its portfolio. Most REITs have annual managers’ fees, property management fees, trustees’ fees and other expenses that will be deducted from their cash yields before distributions are made.

Similar to securities trading, the transaction costs include:

- prevailing brokerage commissions;
- clearing fee of 0.05% on the value of the contract (subject to a maximum of S$200); and
- Goods and Services Tax of 3% on brokerage commissions and clearing fees.

Transactions in REITs are cleared and settled by CDP in the same manner as other securities listed on SGX, i.e. on the third business day after trade date, or T+3.

Different risk profile (investor/co)

Way for developer to:

- Raise funds
- Free up balance sheet Unlock value of ‘discounted assets’
- Capture value – bring forward profits & reduce risks

Recurring fee income

1. Steady Passive Income
REITs offer regular income distributions, which are often tax-exempt for individual investors in Singapore. Their structure provides stability and visibility of income, making them an attractive option for passive cash flow.

2. Accessibility to Large-Scale Real Estate
REITs allow investors to gain exposure to high-value commercial, industrial, or residential properties with a relatively small capital outlay, essentially offering access to property investments in "bite-sized chunks."

3. Liquidity and Ease of Trading
Unlike physical real estate, REITs are listed on the SGX and traded like stocks, offering greater liquidity and flexibility for investors.

4. Diversification
REITs help reduce concentration risk by allowing investors to diversify across different property sectors and geographic regions. Some REITs even allow investors to focus on specific subsectors, such as retail, industrial, or hospitality.

5. Professional Management
REIT assets are managed by experienced professionals who handle operations, leasing, and property improvements—removing the day-to-day burden of property management from investors.

6. Transparency and Governance
REITs operate under strict regulatory frameworks, with regular disclosures and oversight that promote investor protection, transparency, and good corporate governance.