LISTING A REAL ESTATE INVESTMENT TRUST (REIT) IN SINGAPORE OR CHINA? IN THE PERSPECTIVE OF CHINESE DEVELOPERS

Abstract

The long-awaited publicly offered REITs were finally established in the China stock market on 21 June 2021. Nevertheless, there is no past research reviewing the performance of C-REITs. The dissertation aims to evaluate the performance of C-REITs and S-REITs and investigate the existing gaps between China and Singapore REIT markets in the tax regime, governance regulations and related risks. Ideally, Chinese developers can gain insights on whether to list their REIT in Singapore or China. The performance review includes six industrial C-REITs, five China-centric S-REITs and one industrial S-REIT. The performance assessment is done from June 2021 to June 2022 through eight performance indicators across three criteria: IPO performance, post-IPO performance and operating performance. The results show the strong local demand for C-REITs as evidenced by their growing share price against the stock market performance. Additionally, industrial C-REITs whose shares trade at a premium to NAV, while the China-centric S-REITs are traded at a discount to NAV. On the contrary, the risk premium required by China REIT market investors is generally below the risk premium of S-REIT. Hence, the industrial C-REITs indeed outperform the China-centric S-REITs, except for the lower dividend yield. Besides, Chinese developers can enjoy better governance, tax transparency and diversification benefits by listing in Singapore. On the other hand, Chinese developers can benefit from larger fundraisings, price appreciation and no currency risks by listing in China.