A STUDY ON FAILURE OF FIRST SINGAPORE REAL ESTATE INVESTMENT TRUSTS (SREITS)

Abstract

This is a study on the failure of the first Singapore Real Estate Investment Trusts (SREITs) launched. The study aims to explore what are the perceived benefits and concerns of REITs that will motivate, as well as deter various potential investors from investing in it, to discuss the pricing issue of SingMall Property Trusts (SPT) and to find out what are the constraints to offer higher dividend yields. The survey conducted had actually found that there were certain relationships between investors' investment objectives and the factors that will motivate as well as deter them from investing in REITs. Whereas the case study on SPT had concluded that market calls for a discount to net asset value in pricing for REITs rather than a premium. Furthermore, it was found that the lack of tax transparency ruling and the nature of the property market of Singapore had acted as impediments to higher dividend pay out. The findings and results of this research paper hope to serve as a rough guide on what are the factors the originators can pay attention to when designing for future REITs that will be launched in Singapore.