Mallesons Stephen Jaques has advised the Allco Finance Group on the establishment and listing of its first Singapore real estate investment trust (REIT) on the Singapore Exchange.
The S$698.4 ($581.6) million gross asset value includes a 50 per cent interest in the Central Park office building in Perth, a 100 per cent interest in the China Square Central complex in Singapore, and an investment in the Allco Wholesale Property Fund, which includes Australian real estate property assets.
According to Mallesons partner Tim Blue, there is a lot of REIT activity in both Singapore and Hong Kong at present. “They’ve both had regulations allowing real estate investment trusts for relatively short periods of time. Singapore is slightly ahead of Hong Kong in timing. As a result there are now seven or eight REITs that have been listed in Singapore.” Hong Kong has a number of REIT transactions in the pipeline, he said.
“All of the REIT transactions in Singapore and Hong Kong are interesting at the moment because of the newness of the regulations and the fact that the regulators are still coming to grips with how to administer the REIT regulation. There has been significant evolution in the regulation in the past 12 months,” he said. Blue added that the market is still evolving.
Andrew Erikson, also a partner at Mallesons, agreed, claiming “recent positive regulatory developments in Singapore make it an exciting time for real estate investment trusts”.
Mallesons’ teams in both Sydney and Melbourne assisted the Singapore-based underwriters to understand Australia’s real estate property and stamp duty laws. As well, they were involved in the preparation of the REIT prospectus that was lodged with the Monetary Authority of Singapore.
The Allco REIT is the second involving an Australian client, said Blue. “It is interesting because it involves a portfolio of properties outside Singapore, including Australia. So it has a broader asset base. It is being marketed on the basis that it will be a pan-Asia property investment vehicle. So it is distinguishable on that basis,” he said.
“We feel we have a significant natural advantage in advising clients on the REIT markets in Singapore and Hong Kong because the basic system is modelled on the Australian regulation prior to the move to a single responsible entity in 1998,” Blue said.