Investment-friendly Singapore was the first country in Asia to introduce a strict regulatory framework to facilitate the launch of real estate investment trusts (reits), making it one of the world's most attractive markets for these funds.
Singapore has 18 listed reits with a total market capitalisation of more than US$17billion, while Hong Kong's fledgling reits market showed only four at the beginning of the year with a market capitalisation of US$6.3billion.
Australia is by far the Asia-Pacific leader with more than 30 reits with a market capitalisation of US$74billion.
Average dividend yields put Singapore ahead of the United States, Hong Kong and Japan, with a way to go to catch leader Australia. But Savills Singapore director (corporate business and residential) Ku Swee Yong said Singapore had provided 'excellent' foundations for its reit development and expected the island state to continue to outperform other countries in the region.
'It has only been five years since the first reit was listed on the Singapore Stock Exchange. We have 18 now,' Mr Ku said.
'The assets put under the reits have demonstrated good performance since. The professional management of these assets (as compared to pre-reit days when buildings were managed by the range of landlords of varying capabilities) have also enhanced their rentals and enhanced asset utilisation.'