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Hong Kong starts Reit subsidy plan to make up for lost decade as rival markets flourish from Singapore to Japan
- The government launched a HK$270 million (US$35 million) plan to encourage property owners to cobble their assets together under real estate investment trusts
- Hong Kong would like to position itself as a hub for Reits, having fallen a long way behind regional rivals
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Hong Kong is trying to make up for a lost decade with incentives to promote the city as a hub for real estate investment trusts (Reits), after a stop-start history during which markets in Singapore and Japan flourished.
The government last week put into action a HK$270 million (US$35 million) plan to encourage property owners to cobble their assets together under Reits to defray their listing expenses. The Securities and Futures Commission on May 10 announced the implementation details of the subsidy plan, first unveiled during the budget in February.
The grant will also be offered to fund managers who launch open-ended funds in Hong Kong.
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The subsidy, however, has drawn flak from shareholder activist David Webb, who called it a “cockamamie” scheme that only favours bigger tycoons. Others said the benefits do not go far and wide enough.
“By encouraging a broader range of investment vehicles, the grant scheme will reinforce Hong Kong’s role as a leading capital-raising venue and its status as an international asset and wealth management centre,” the SFC’s chief executive, Ashley Alder, said.
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