Asia Pacific REITS Survey 2011

ASIA-PACIFIC
REIT SURVEY
APRIL 2011
Results of a benchmark survey
of senior property professionals
to understand perceptions of
REIT markets in Asia-Pacific.
SOUTH KOREA JAPAN
CHINA
TAIWAN
HONG KONG
INDIA THAILAND
VIETNAM THE PHILIPPINES
MALAYSIA
SINGAPORE
INDONESIA
AUSTRALIA
2 | Asia-Pacific REIT Survey 2011

WELCOME
Welcome to the fifth edition of the Asia-Pacific REIT Survey. WELCOME 3
The Trust Company is delighted to again partner with Asia-Pacific’s ABOUT US 4

leading law firm, Baker & McKenzie. Baker & McKenzie have once
BACKGROUND TO SURVEY 5
more provided an updated country analysis section with descriptions
of the regulatory and investment regime for REITs in each of the 13 RESPONDENT PROFILE 6
markets covered in the survey.
SURVEY RESULTS 8
We would like to take this opportunity to thank all those who took
the time to complete the survey. This year, we had 137 respondents COUNTRY SUMMARY AND
from 109 companies with 93% of respondents residing or having LEGAL UPDATE 20
lived in Asia (79% of those for more than five years). We have
CONTACT US 34
intentionally used the same questions for the past five years in order
to measure and analyse the trends over this period.
In our last REIT Survey, published in June 2010, we saw dramatic

improvement in the short-term outlook for REITs compared to the
previous year. In the 2011 survey, the percentage of respondents
predicting companies will increase the size of existing REITs
and launch additional REITs remained steady at 48% and 20%
respectively. We have seen evidence of this over the past 12
months with many Singapore REITs acquiring further real estate
– for example, K-REIT and YTL Starhill Global REIT both acquired
properties in Australia over the past year. Also, the listing of the
Sabana Shari’ah-compliant Industrial REIT in November 2010 created
a number of “firsts” including the world’s largest listed Shari’ah-
compliant REIT, the first Shari’ah-compliant REIT listed in Singapore,
and the first listed REIT in the world to adopt GCC Shari’ah-
compliant standards.
However, while growth prospects appear good, the Asia-Pacific

REIT markets still have further capacity to grow. The latest European
Public Real Estate Association statistics reveal that listed REITs
in Asia-Pacific still only represent US$475bn1 or 9.8%2 of the total
US$4.877bn3 in underlying real estate. In terms of threats to REITs,
the leading challenge to REIT markets’ remains adverse taxation
developments, though its percentage has decreased. The percentage
for all other threats have either reduced or remained constant. Also,
for the first year ever, Australia has pipped perennial leader Singapore
as the country offering the greatest growth prospects for REITs.
However, growth can take different forms – we have seen six takeover
transactions in Australia in the past year – with the most notable being
the privatisation of the ING Industrial Fund by a consortium led by
Goodman and backed by Canadian Pension Plan Investment Board, All
Pensions Group and China Investment Corporation.
Overall, the REIT sector appears positioned for further growth. The
sector has successfully navigated to the other side of the two most
tumultuous years in its history. It will be interesting to see if this
growth takes the form of further mergers and acquisitions, new REIT
IPOs, or existing REITs making further property acquisitions.
We hope that you find the 2011 edition of the Asia-Pacific Survey a
valuable resource in understanding current market sentiment and
where the sector may be heading in the year ahead.
John Atkin Milton Cheng

Chief Executive Officer Partner
The Trust Company Asia-Pacific REITs Practice Group Leader
Baker & McKenzie
1. Source: IP, Real estate March/April 2011

The Trust Company and Baker & McKenzie | 3
ABOUT US
ABOUT THE TRUST COMPANY ABOUT BAKER & MCKENZIE

When it comes to corporate trustee services, we believe Baker & McKenzie has provided sophisticated legal advice
there is no substitute for experience. With over 125 years of and services to many of the world’s most dynamic and
financial expertise, which includes over 55 years providing global organisations for more than 60 years. We have
corporate trust services, we at The Trust Company are the knowledge and resources to deliver the broad scope
one of the most experienced trustees in the Asia-Pacific. of quality legal services required to respond effectively
Our experience is founded upon the consistent delivery of to both international and local needs – consistently,
insight, intelligence and proven expertise. These qualities confidently and with sensitivity for cultural, social and legal
are exactly how we deliver professional governance, practice differences.
compliance, custodial and trustee services to meet your
corporate responsibilities. As one of the first international law firms to recognise the
importance of the Asia-Pacific, Baker & McKenzie has been
We’re the only corporate trustee licensed to provide assisting clients operating throughout the region for more
corporate trustee services in Australia, New Zealand than 40 years.
and Singapore. This allows us to build tailored products,
fashioned to suit the subtleties of businesses in each We are one of the largest law firms in Asia, with more
country within the region – and your business in particular. than 1,100 lawyers spanning 14 offices. As part of
In addition to facilitating the structuring of over A$3 billion* Baker & McKenzie’s global network of 3,750 locally qualified,
of property transactions in the past 18 months, we currently internationally experienced lawyers in 40 countries, each
act as the trustee or custodian for global assets totalling office and member firm provides a full spectrum of legal
in excess of A$115 billion*. This showcases that a business services to a range of clients. We are able to bring the right
has already benefited from the experience, ingenuity and team of lawyers to best serve clients’ needs.
genuine local knowledge of our dedicated teams.
Our Asia-Pacific practice comprises full service offices
We’ll be your: located in Bangkok, Beijing, Hanoi, Ho Chi Minh City,
Hong Kong, a correspondent firm in Jakarta, Kuala Lumpur,
• Trustee for any type of collective investment scheme Manila, Melbourne, Shanghai, Singapore, Sydney, Taipei
and Tokyo. In India and South Korea, we have longstanding
• Custodian and cash administrator for wholesale, relationships with respected firms and regularly engage
private or exempt property funds them to provide full regional coverage for clients requiring it.
• Debenture/ bond trustee The Baker & McKenzie Asia-Pacific REITs Group has been
at the forefront of ground-breaking REIT transactions in
• Security trustee Asia. The team has acted on almost all of the significant
transactions to date involving REITs listed or with assets in
• Escrow agent Hong Kong and has also advised on other significant REIT-
related deals across Asia-Pacific and Australia.
*as of 31 March 2011

BACKGROUND
In order to develop a better understanding of the REIT DATA INTERPRETATION

markets in Asia-Pacific and the local nuances in each
country, The Trust Company, in 2007 undertook an The survey questions used a 5-point rating scale where 1
inaugural survey of real estate professionals in the Asia- and 2 equal a negative rating, 3 equals a neutral rating and
Pacific region on their perceptions for growth in the Asia- 4 and 5 equal a positive rating.
Pacific REIT markets. This is the fifth issue of the Asia-
Pacific REIT Survey that continues to study and compare For easy interpretation a colour code system has been
these results, now over a five-year period. used in some graphics, where orange highlights a negative
rating, purple highlights a neutral rating and blue highlights
This survey seeks to ascertain their views on the following a positive rating.
specific areas:
1. Property Market growth: which countries offer the best Rating index
prospects for growth?
2. Market growth: which markets offer the best prospects

for growth of REITs?
Positive Neutral Negative
3. REIT opportunities: which countries offer the best
opportunities for REITs?
In order to monitor changes in the REIT market outlook
4. Overall REIT potential: what is the overall rating for each
over time, we have compared the results year-on-year.
country after combining the results of the 3 measures?
The survey and research each year was taken between the
5. Regulatory support: how supportive is the regulator to
following times:
new REITs in each country?
• 2007: 4 December 2006 and 19 January 2007
6. REIT outlook: what is the greatest threat to REITs, and
what does the future of REITs look like? • 2008: 20 November 2007 and 16 December 2007
The Trust Company is delighted to again be partnering • 2009: 16 October and 10 November 2008
with Baker & McKenzie for this year’s survey. Baker &
McKenzie have provided the country summary and legal • 2010: 28 January and 8 March 2010
update. This is a succinct update of the current REIT
legislation, along with their perspective on issues affecting
that particular market.
SURVEY METHODOLOGY:
Members of the property community were invited by
email to participate in the survey. This email contained a
URL to an on-line survey tool, with an individual login and
password for security and to protect individual respondent
confidentiality.
The on-line survey was undertaken between 24 January

and 21 February 2011 by Latham Consulting, a Sydney-
based performance management consultancy.

RESPONDENTS
A total of 137 respondents completed the survey, about the

same as 2010.
The quality of the sample is excellent in that the 109

companies represented are all well respected in the
property market; 93% of respondents reside or have lived in
Asia (79% for more than five years); 57% are senior property
professionals, 58% are with international companies.
The profile of respondents is similar to previous years. Key

points regarding the demographics of respondents are
outlined below.
Country of residence
Malaysia 2%
Other 5%
Hong Kong 7%
Nationality
Australia 60% Chinese 2%
Singapore 25% American 2% New Zealand 2%
Other 4%
British 4%
Malaysian 4%
Australian 67% Singaporean 13%

Time in Asia
Do not work in Asia 7%
Less than a year 1%
3 - 5 years 13%
10 years+ 57%
5 - 10 years 22%

Role
Property owner 7%
Investment banker 7%
Fund manager 31 % Tax/Acc’t

professional 13%
Property
professional 19%
Lawyer 22%
Type of Firm
International 58% Local 42%
Age
Under 30 years - 2%
30-40 years - 28%
40+ years - 70%

SURVEY RESULTS
1. WHICH ASSET CLASS OFFERS THE BEST

PROSPECTS FOR REIT GROWTH?
Respondents were asked to rate each REIT asset class on
their growth prospects.
The recovery from the global financial crisis that

significantly impacted the REIT market in Asia in 2009 has
continued. Market growth prospects have recovered across
most sectors and overall across the region by 6% from last
year, to be back to a level not seen since 2007/08.
The Commercial Office sector has the highest rating (67%).

This sector has shown the greatest growth (12%) since last
year and has overtaken Infrastructure (66%) which is now
ranked second by respondents although it is at its highest
level since the survey began.
Healthcare is also at its highest level (60%) since the

survey began, with growth of 7%, along with Industrial
(59%) and Hotels (55%).
Residential has declined slightly to 54% but is still

slightly above its 2007 high, with only 37% of people
rating it positively.
100
REIT Asset Class – Ratings Trend – 2007-2011
90
80
70 67% 66%
60% 59%
60 57%
55% 54%
50
40
30
20
10
0
Commercial Infrastructure Healthcare Industrial Retail Hotels Residential
Office
2007 2008 2009 2010 2011

2. WHICH COUNTRY’S PROPERTY MARKET Double-digit growth was shown by Indonesia, up 12% (on
top of 15% last year) to a high of 58%, level with Vietnam.
OFFERS THE BEST PROSPECTS FOR Malaysia recorded growth of 10% to its high of 55%. Taiwan
GROWTH? and Korea grew 3% to 53%.
Respondents were asked to rate each country on their
property market growth prospects. 2010 new entrants Thailand (49%) and The Philippines
(47%) showed similar growth. Despite a 6% growth from
Property market growth prospects have recovered by a 2010, with only 15% of respondents rating them positively,
further 7% across the whole region on top of growth of Japan continues to be seen as the least attractive (42%).
7% last year, with 38% of respondents providing positive
ratings.
China (73%) has increased by 5%, back to pre-GFC levels,

and is still ranked as the best prospect for growth with 79%
of respondents rating the market positively. India retains its
second ranking (up 7% to 67%) and is rated positively by
64% of respondents.
Singapore has shown growth of 9% to rank third at its

equal highest rating of 64%. Australia, with growth of 3%,
is now ranked fourth with its highest rating yet (61%). Hong
Kong has shown growth of 6% to reach its highest level
(59%) in the history of the survey.
100
Property Market Growth – Ratings Trend – 2007-2011
90
80
73%
70 67%
64%
61%
60 59% 58% 58%
57%
55%
53% 53%
49%
50 47%
42%
40
30
20
10
0
REGION India Australia Indonesia Malaysia Korea Philippines
China Singapore Hong Kong Vietnam Taiwan Thailand Japan
2007 2008 2009 2010 2011

3. WHICH COUNTRIES IN THE ASIA-
PACIFIC OFFER THE BEST OPPORTUNITY
FOR REITs?
Respondents were asked to rate each country in terms of
its REIT potential.
REIT opportunity prospects have improved across the

whole region by 4% from last year to 50%.
Australia, at its highest ever level, (up 6% to 66%) is now

ranked just ahead of perennial leader Singapore (up 5% to
65% which is still below the 2007/08 levels).
China has shown a slight decline (1%) to 57% but retains

third place, with Hong Kong improving 3% to 53%, though
these levels are still below the 2007/08 levels.
The biggest increases were Malaysia (up 8% to 51%),

Indonesia to a new high (up 6% to 40%) and Vietnam (up
5% to 41%).
2010 newcomers Philippines (up 3% to 40%) and Thailand

(up 4% to 39%) are still seen as the least attractive growth
prospects.
100
REIT Opportunity – Ratings Trend – 2007-2011
90
80
70 66% 65%
60 57%
53%
50% 51%
50% 49%
50 48%
46%
41% 40% 40%
40 39%
30
20
10
0
REGION Singapore Hong Kong Korea Japan Vietnam Philippines
Australia China Malaysia India Taiwan Indonesia Thailand
2007 2008 2009 2010 2011

4. HOW SUPPORTIVE IS THE REGULATOR
TO NEW REITs IN EACH COUNTRY?
Respondents were asked to rate the regulatory support of
REITs in each country.
Ratings of Regulatory Support have improved, overall, by

3% from last year to a survey high of 49%.
Greatest increases were in Singapore and Hong Kong (7%),

Australia, Malaysia and Vietnam (5%).
Singapore (77%) is still ranked as the highest in regulatory

support and was rated positively by 81% of respondents,
with Australia still ranked second (72%) and rated
positively by 74%.
Hong Kong is ranked a distant third (61%) with Japan

(53%) ranked fourth.
Vietnam (37%), India (36%) and Indonesia (34%) ranked

lowest and have the highest proportion of respondents
providing a negative rating.
100 Regulatory Support – Ratings Trend – 2007-2011
90
80 77%
72%
70
61%
60
56%
51%
50 49% 48%
46%
41% 41% 40%
40 37% 36%
34%
30
20
10
0
REGION Australia Japan Korea Philippines China India
Singapore Hong Kong Malaysia Taiwan Thailand Vietnam Indonesia
2007 2008 2009 2010 2011

5. WHAT IS THE OVERALL REIT
POTENTIAL RATING FOR EACH COUNTRY?
An overall “Potential” rating for each country is calculated
by combining the three main measures of:
1. Property market growth
2. REIT opportunities
3. Regulatory support
Country Rating 2011

Overall % +/- property % +/- REIT % +/- Regulatory % +/-
potential 2010 market growth 2010 opportunity 2010 support 2010
SINGAPORE 69% 7% 64% 9% 65% 5% 77% 7%
AUSTRALIA 66% 5% 61% 3% 66% 6% 72% 5%
HONG KONG 58% 5% 59% 6% 53% 3% 61% 7%
CHINA 57% 1% 73% 5% 57% -1% 40% -4%
MALAYSIA 53% 8% 55% 10% 51% 8% 51% 5%
INDIA 51% 3% 67% 7% 49% 2% 36% -1%
KOREA 50% 2% 53% 3% 50% 1% 48% 2%
JAPAN 48% 4% 42% 6% 48% 4% 56% 3%
TAIWAN 48% 2% 53% 3% 46% 3% 46% 2%
VIETNAM 45% 4% 58% 4% 41% 5% 37% 5%
INDONESIA 44% 7% 58% 12% 40% 6% 34% 4%
PHILIPPINES 43% 4% 47% 9% 40% 3% 41% -1%
THAILAND 43% 6% 49% 8% 39% 4% 41% 4%
REGIONAL
52% 5% 57% 7% 50% 4% 49% 3%
AVERAGE
Overall “Potential” ratings have improved by 5% to 52%

from last year, back to the pre GFC level in 2007.
Greatest increases were in Malaysia (8%), Singapore (7%)

and Indonesia (7%).
Singapore (69%) is still rated as the highest overall with

Australia ranked second (66%), its highest survey rating.
Indonesia (44%), Philippines (43%) and Thailand (43%)

have below average ratings and are still seen as the
countries with least potential.

5.1 COUNTRY SUMMARY
An overview of each country summary and accompanying comments from the respondents are outlined below:
Singapore Rating +/- Ranking Ratings Distribution (%)
2007 2008 2009 2010 2011 2010-11 2011 2010 Positive Neutral Negative
OVERALL "POTENTIAL" 70% 71% 57% 62% 69% 7% 1 1 63% 33% 4%
PROPERTY MARKET GROWTH 61% 64% 46% 54% 64% 9% 2 4 53% 43% 5%
REIT OPPORTUNITY 72% 71% 52% 60% 65% 5% 2 1 55% 38% 6%
REGULATORY SUPPORT 78% 79% 73% 70% 77% 7% 1 1 81% 18% 2%
Comments
Property Market Growth:
• Good office employment trajectory bodes well for occupation and rents; the tendency of the government to release
large volumes of land adds some risk
REIT opportunity:
• There is still a lot of stock to securitize; attractive location for international assets too
Australia Rating +/- Ranking Ratings Distribution (%)

Comments
• Good fundamentals of demand and supply; shortage of stock for institutional capital; cost of debt is at or above
property yield; cost of hedging A$ is high - so international buyers are deterred by technical factors rather than
property fundamentals
• Good - in particular, Sydney and Melbourne office property
Regulatory support:
• Outstanding issues to be clarified regarding Managed Investment Trust and Investment Management legislation;
Hope the various government agencies are speaking to each other
Hong Kong Rating +/- Ranking Ratings Distribution (%)

Comments
• Good market fundamentals but prices pumped up by mainland Chinese investors who are not yield sensitive; zero
supply limits ability to invest; any upward move in interest rates likely to have major negative impacts
REIT Opportunity:
• Little stock to acquire; no real tax benefits over a real estate company which does not suffer from REIT restrictions

China Rating +/- Ranking Ratings Distribution (%)
REIT OPPORTUNITY 55% 58% 49% 58% 57% -1% 3 3 43% 36% 20%
REGULATORY SUPPORT 35% 40% 34% 44% 40% -4% 10 7 9% 48% 44%
Comments
• Problems for international buyers to obtain required returns - increasing competition from local investors who
have different rationale for investment and hence different pricing metrics; offshore vehicles have inherent tax risk;
development plays put too much control in hands of local partners. Overall an attractive but difficult market for
foreign investors
• Whilst we believe the market long term has growth prospects, we believe it is overheated as a REIT opportunity
REIT opportunity:
• Demand for income from retail investors - insatiable demand for quality product
• Primarily cross border REITs as REIT code is not yet ready in China
• For the foreseeable future, I do not see that any domestic REIT will be rewarded with going back offshore given
the experience they have had during the GFC hence why I have rated China’s prospects for investment offshore as
poor
Malaysia Rating +/- Ranking Ratings Distribution (%)

Comments
• Good economics but tenants seem to be happy to occupy very low quality space and hence rental trends seems to
be very flat
India Rating +/- Ranking Ratings Distribution (%)

REGULATORY SUPPORT 39% 35% 32% 37% 36% -1% 12 10 7% 41% 52%
Comments
• India’s indifference to REIT law and its logistic and cultural difficulties are the reasons for giving it a low growth
prospect marking
• Should be strong, difficult without strong regulatory support

South Korea Rating +/- Ranking Ratings Distribution (%)
PROPERTY MARKET GROWTH 54% 57% 39% 50% 53% 3% 9= 8 23% 64% 12%
Comments
• Good economic fundamentals but tough to compete with local capital
Japan Rating +/- Ranking Ratings Distribution (%)

Comments
• Tokyo - OK; less opportunities outside of Tokyo
REIT Opportunity
• Poor fundamentals to underpin investments
Taiwan Rating +/- Ranking Ratings Distribution (%)

Comments
• Economy going well
Vietnam Rating +/- Ranking Ratings Distribution (%)

Comments
• Small, high risk market with high inflation and falling value of local currency able to wipe out any US$ returns to
investors

Indonesia Rating +/- Ranking Ratings Distribution (%)
REIT OPPORTUNITY 31% 33% 26% 34% 40% 6% 11= 13 11% 45% 44%
Comments
• Somewhat unknown market; unclear if there is any liquidity to sell
• Transparency remains a concern
Philippines Rating +/- Ranking Ratings Distribution (%)

OVERALL "POTENTIAL" n/a n/a n/a 39% 43% 4% 12= 11 11% 54% 36%
PROPERTY MARKET GROWTH n/a n/a n/a 38% 47% 9% 12 12 15% 58% 27%
REIT OPPORTUNITY n/a n/a n/a 38% 40% 3% 11= 10 10% 49% 41%
REGULATORY SUPPORT n/a n/a n/a 42% 41% -1% 8= 9 7% 54% 39%
Thailand Rating +/- Ranking Ratings Distribution (%)

OVERALL "POTENTIAL" n/a n/a n/a 37% 43% 6% 12= 12 13% 50% 38%
PROPERTY MARKET GROWTH n/a n/a n/a 40% 49% 8% 11 11 18% 58% 24%
REIT OPPORTUNITY n/a n/a n/a 35% 39% 4% 13 12 10% 40% 50%
REGULATORY SUPPORT n/a n/a n/a 37% 41% 4% 8= 11 9% 51% 40%
Comments

• Small economy, historically volatile politics deters investors

6. OUTLOOK FOR REITs
Respondents were asked a number of questions on the
future of, and threats to REITs, to determine the overall
outlook for the future.
6.1 FUTURE OF REITs

Respondents were asked which of these three statements best
reflects their view of the future of REITs in the Asian region:
In the short-term (1-2 years) and long-term (3-5 years)

companies with existing REITs will:
• Stay about the same size
• Increase the size of existing REITs
• Launch additional REITs
Short-Term Outlook For REITs - Trends
2011 20% (3-5 years) 48% 32%

Short term
2010 20% 47% 33%
2009 3% 20% 77%
2008 38% 55% 7%
2007 45% 51% 4%
0 10 20 30 40 50 60 70 80 90 100
Launch additional REIT’s Increase the size of existing REIT Stay about the same size
The short term outlook for REITs remains the same as last
year, but is a more positive sentiment than in 2009:
• 48% of respondents predict companies will increase

the size of existing REITs;
• 32% expect existing REITs will stay about the same

size;
• 20% of respondents believe additional REITs will be

launched, well down on pre GFC levels.

Long-Term Outlook For REITs - Trends
2011 60% 37% 3%
2010 55% 43% 2%
2009 42% 53% 5%
2008 54% 46%
2007 67% 31% 2%
0 10 20 30 40 50 60 70 80 90 100
Launch additional REIT’s Increase the size of existing REIT Stay about the same size
The long term outlook is more optimistic and above 2008

levels:
• 60% of respondents envisage the longer term future

of Asian REITs as one where companies would launch
additional REITs, up from 55% last year;
• 37% see increases in the size of existing REITs.

6.2 WHAT IS THE BIGGEST THREAT FOR REITs?
Respondents were asked to rate each of six potential
threats on a scale of 1 to 10.
Threats to REITs 2007 2008 2009 2010 2011 +/-

% % % % % 2009 - 10
ADVERSE TAXATION DEVELOPMENTS 70% 59% 62% 71% 66% -5%
EFFECTS OF FINANCIAL ENGINEERING 70% 62% 74% 69% 66% -3%
REGULATORY PROCESS 67% 62% 64% 65% 65% 0%
LOW YIELDS 67% 63% 59% 65% 64% -1%
POOR UNDERSTANDING 58% 47% 58% 58% 56% -2%
COST TO MARKET 50% 53% 55% 57% 56% -1%
Respondents see the biggest threats to the future of REITs as:
• Adverse taxation developments was rated the biggest

threat (66%), down from 71% last year and compared
to 59% in 2008;
• Effects of financial engineering (66%), down from 69%

last year;
• Regulatory process (65%) has been relatively

consistent over the period of the survey;
• Low yields (64%) is consistent with last year and back

to pre GFC levels;
• Poor understanding (56%) has remained relatively

constant;
• Cost to market (56%) continues to be seen as the

lowest threat.

COUNTRY SUMMARY
AND LEGAL UPDATE
The following section provides an update on the REIT legislation in each of the selected countries.
1. AUSTRALIA can demonstrate competency in the provision of the

financial service (such as the operation of an investment
When was the REIT regime introduced? scheme such as a REIT) and there is no reason to believe
that the applicant will not fulfil the various obligations
In Australia, there is a long history of REITs as either listed
imposed by the AFSL and the Corporations Act. The
property trusts (A-REITs) or unlisted property trusts. GPT
regulatory approval process involves both a review of
was the first A-REIT, being launched in 1971.
the applicant and consideration of the kinds of financial
Is there a regulatory framework and, in particular, a services which the applicant proposes to provide.
separate regime for REITs apart from that for listed
Foreign exchange control:
entities in general?
• Are there any foreign exchange controls?
There is no special REITs regime. The Corporations Act
2001 (Cth) (Corporations Act) regulates widely held REITs No.
in Australia. A-REITs are also required to comply with the
Australian Securities Exchange (ASX) Listing Rules. Income/profit tax etc:
Have there been recent deals and regulatory or other • Is there any tax exemption at the REIT level for the
developments? REIT’s income/profits?
The response of A-REITs to the global financial crisis was The REIT will not be taxed at the REIT level provided
to raise larger amounts of capital to reduce leverage, that the unitholders (investors) of the REIT are presently
restructure debt arrangements and explore simplification entitled to all of the net income and the REIT is not taxed
and consolidation. as a company. The REIT will not be taxed as a company if
the REIT is not widely held, or where it is widely held, its
In addition, recent tax changes have given an impetus to business activities are limited to earning passive income,
foreign investors entering the market, including foreign such as rent, and not operating a business. A-REITs can
pension and sovereign wealth funds. There has been generally satisfy these requirements.
significant investment by Singapore REITs, north Asian
pension funds and other Asian investment funds. • Is there any tax pass-through to the investors?
Identify any significant factors that may/will impact upon Tax deferred income (broadly where the taxable
the development of the REIT market in the jurisdiction, component of a REIT distribution is less than the amount
such as: of its actual or accounting distribution) is not ordinarily
included in an investor’s annual assessable income.
Land ownership: However, tax deferred income will reduce an investor’s
capital gains tax (CGT) cost base in the units, meaning that
• Are there any restrictions on foreign ownership?
an investor will pay tax on such reduced cost base at the
The Foreign Acquisition and Takeovers Act 1975 (Cth) time of disposal (although at the concessional capital gains
(FATA) requires that notice be given to the Foreign tax rate).
Investment Review Board (FIRB) whenever there is an
• Are there any other tax incentives for REITs?
acquisition of an interest in Australian urban land (or urban
land corporation or trust) by a substantial foreign interest, No specific tax concessions.
and powers are conferred to restrict such investments.
• Is stamp duty applicable?
A “substantial foreign interest” is defined in section 9A of
the FATA as where a single foreigner (and any associates) Stamp duty is payable by REITs on the acquisition of
has 15% or more of the ownership or several foreigners properties, and usually on the acquisition or issue of equity
(and any associates) have 40% or more in aggregate of the in non-widely held REITs.
ownership of any corporation, business or trust. • Is withholding tax applicable?
A limited range of exemptions apply to various persons, Generally, withholding tax can be payable on distributions
including US investors. of Australian sourced gains to non-residents at the top
Licensing/approval of the entity managing the REIT (the marginal rate of tax relevant to the non-resident. Under
“Manager”): the Managed Investment Trust (MIT) regime, initially
introduced in June 2008, from 1 July 2010 “fund payments”
• Is the Manager external or owned by the REIT? made to an MIT to a member of the scheme located in
a foreign country that is an Exchange of Information
Management may be either external or internal. Where
jurisdiction is subject to a final tax liability of 7.5%. The
management is internal, the Manager of the REIT is
requirements for a REIT to qualify for concessional tax
generally owned by another company, the shares of which
treatment under the MIT regime are complex, and include
are stapled to a unit in the REIT.
having an Australian resident trustee, being a “managed
• Does the Manager need to be licensed and what are investment scheme” under the Corporations Act, being
the more significant criteria for the licence/approval? “widely held” (which is defined in a particular manner with
further complex requirements), and having investment
Section 601FA of the Corporations Act requires the management activities in Australia.
operator of a REIT that is registered, to be a public
company and hold an Australian Financial Services Licence
(AFSL). An AFSL will generally be granted if the applicant

2. CHINA With respect to the retail C-REIT product, legal title of the
real estate assets will be transferred to the C-REIT trustee
When was the REIT regime introduced? and the real estate assets will be operated by an external
In December 2008 the Chinese Government formally Manager.
announced its support for pilot schemes of Chinese REIT
• Does the Manager need to be licensed and what are
(C-REIT) products to be offered to the market.
the more significant criteria for the licence/approval?
In 2009, a REIT Working Group led by the Central Bank
With respect to the securitisation C-REIT product, the
was established to develop the C-REIT regime in China.
C-REIT Managers will be trust companies licensed by the
At the time of writing, the Beijing, Tianjin and Shanghai China Banking Regulatory Commission. The qualification
local governments had prepared various C-REIT products, requirements are yet to be announced.
mainly inter-bank products, for approval by the State
With respect to the retail C-REIT product, the C-REIT
Council. These products should be launched soon after
Managers will be investment fund management companies
approval by the State Council, however it is uncertain when
licensed by the China Securities Regulatory Commission.
this will be.
At the time of writing, the qualification requirements were
Is there a regulatory framework and, in particular, a yet to be announced.
Foreign investment:
Specific C-REIT legislation will be enacted and will be • Are there any restrictions on foreign investment in real
premised on the existing national legislation governing estate?
trust products, securities offerings, investment fund Yes. China has strict exchange controls over all foreign
management, and securitisation. Various draft C-REIT direct investment transactions. Foreign companies are not
regulations have been formulated, however these are yet to allowed to directly acquire and hold investment property
be promulgated. in China. Foreign investment in Chinese-incorporated
It is expected that China will run two different pilot real estate companies are subject to many regulatory
schemes of C-REIT products. One is essentially a scheme restrictions.
of securitisation of revenue streams from a pool of real Income/profit tax etc:
estate assets that will be offered to institutional investors
and traded on the inter-bank market. The other product • Is there any tax exemption at the REIT level for the
will be offered to retail investors and will resemble the REIT REIT’s income/profits?
products offered in Hong Kong and Singapore.
It is expected that the C-REIT regime will adopt the general
Identify any significant factors that may/will impact upon principle of tax neutrality, i.e. there will be no special
the development of the REIT market in the jurisdiction, income/profits tax exemption for C-REIT products.
such as:
• Is there any tax pass-through to the investors?
Title system:
It is expected that this will be permitted.
• Does the title system pose any difficulty for acquisition
• Are there any other tax incentives for REIT
of property for investment by a REIT?
It is expected there will be no special tax incentives for
With respect to the securitisation C-REIT product, there
C-REIT products.
will be no transfer of real estate title. It has been reported
that there will be a new system for registration of trust over • Is stamp duty applicable?
real estate in support of this type of C-REIT product.
Real estate transactions are subject to stamp duty and
With respect to the retail C-REIT product, the real estate other indirect taxes. It is expected that there will be no
title will be transferred to the trustee. special exemption for C-REITs.
Land ownership: • Is withholding tax applicable?
• Are there any restrictions on foreign ownership? It is expected that there will be no special exemption for
C-REITs.
With effect from July 2006, foreign companies are no
longer allowed to directly acquire and hold investment
property in China. Acquisitions completed before July
2006 are grandfathered.
Licensing/approval of the entity managing the REIT (the
“Manager”):
• Is the Manager external or owned by the REIT?
With respect to the securitisation C-REIT product, it is
expected that legal title of the real estate assets will not be
transferred and the existing owner will continue to retain
operational control over the assets.

3. HONG KONG are regulated under the SFO. Key licensing requirements
for Managers include Hong Kong incorporation, responsible
When was the REIT regime introduced? officer composition, competence and relevant experience,
The Securities and Futures Commission (SFC) introduced the and sufficiency of financial resources.
Code on Real Estate Investment Trusts (REIT Code) in July
Foreign investment:
2003. To date there have been eight REITs (HK-REITs) listed
on The Stock Exchange of Hong Kong Limited (SEHK). • Are there any restrictions on foreign investment in real
estate?
Is there a regulatory framework and, in particular, a
separate regime for REITs apart from that for listed No.
The key laws and regulations that apply to publicly listed
HK-REITs are the REIT Code, the Securities and Futures • Are there any foreign exchange controls?
Ordinance (SFO), the Codes on Takeovers and Mergers and
No.
Share Repurchases (Takeovers Code), and the SEHK Listing
Rules. Income/profit tax etc:
The REIT Code sets out specific guidelines for the • Is there any tax exemption at the REIT level for the
establishment and operation of HK-REITs. The SFO deals REIT’s income/profits?
with authorisation and licensing matters for HK-REITs. The
Takeovers Code governs takeover and merger activity SFC authorised and listed REITs are exempt from
involving HK-REITs. As listing is mandatory, HK-REITs must profits tax in Hong Kong to the extent the profits arise
also comply with the SEHK Listing Rules. from investment activities that comply with the REIT’s
constituent documents and the REIT Code. Where a HK-
Have there been recent deals and regulatory or other REIT holds real estate directly, and its rental income is not
developments? subject to profits tax, property tax will apply at 15%.
On 25 June 2010, the regulatory framework governing
Where real estate is held via a Special Purpose Vehicle
the takeovers and mergers of listed companies in Hong
(SPV), the SPV is typically subject to profits tax in respect
Kong was extended to REITs with a primary (and in certain
of profits arising in or derived from Hong Kong (e.g. rent
circumstances, a secondary) listing of units in Hong Kong.
from Hong Kong real estate) at 16.5%. Property tax will
The provisions in the SFO relating to market misconduct generally not apply in this situation.
and disclosure of interests in listed companies will be
Income derived from foreign real estate and capital gains
extended to include (among others) listed HK-REITs. Further
are exempt from profits tax and property tax does not
developments in this regard are expected later in 2011.
apply to foreign rental income or capital gains.
The SEHK and the SFC have publicly indicated that they
are preparing for the imminent listing of RMB-denominated
equity securities. There is an expectation that the first listed While not specifically tax-exempt, the Hong Kong Inland
RMB-denominated securities will be by way of a HK-REIT. Revenue Department’s practice is not to tax a HK-REIT’s
distributions in the hands of unitholders. Investment/
Identify any significant factors that may/will impact upon
capital gains on disposal of units are not subject to profits
the development of the REIT market in the jurisdiction,
tax. However, trading or revenue gains are subject to
such as:
profits tax in the hands of persons carrying on a business
Title system: of trading units in Hong Kong.
• Does the title system pose any difficulty for acquisition • Are there any other tax incentives for REIT?
No.
No.
Land ownership:
The transfer of HK-REIT units, shares in a Hong Kong-
• Are there any restrictions on foreign ownership? incorporated SPV and Hong Kong real estate are subject to
No. stamp duty in Hong Kong.
Licensing/approval of the entity managing the REIT (the • Is withholding tax applicable?
“Manager”): There is no withholding tax on distributions paid by a HK-
• Is the Manager external or owned by the REIT? REIT.
The REIT Code allows both externally and internally managed

structures. All but one HK-REIT has an externally managed
structure.
• Does the Manager need to be licensed and what are the
more significant criteria for the licence/approval?
Yes. HK-REIT Managers must be licensed and their activities

4. INDIA Land ownership:
When was the REIT regime introduced? • Are there any restrictions on foreign investment in real
estate?
India does not have an existing regime for REITs in India
(I-REITs). Subject to very limited exceptions, the Foreign Exchange
Management (Acquisition and Transfer of Property in
The Securities and Exchange Board of India (SEBI) has India) Regulations issued by the Reserve Bank of India
been contemplating the introduction of an I-REIT regime under the Foreign Exchange Management Act 1999
in India, and issued Draft Real Estate Investment Trusts restrict foreign ownership of immovable property in India.
Regulations (Draft Regulations) in 2007. While media
reports have indicated that the final regulations may be Licensing/approval of the entity managing the REIT (the
issued in the short term, SEBI is yet to advise. “Manager”):
In the interim, under the SEBI (Mutual Funds) • Is the Manager external or owned by the REIT?
(Amendment) Regulations 2008 (REMF Regulations) A REIMC need not necessarily be independent of
Real Estate Mutual Funds (REMF) may invest directly or the I-REIT. However, the REIMC must be a company
indirectly in real estate assets provided certain criteria are incorporated under the Indian Companies Act 1956 and
met. be registered with SEBI.
Is there a regulatory framework and, in particular, a • Does the Manager need to be licensed and what are
separate regime for REITs apart from that for listed the more significant criteria for the licence/approval?
The REIMC must be registered with SEBI. Some significant
There is currently a proposal to have a separate regime registration criteria include minimum net asset values,
for I-REITs. directors and key personnel (with particular expertise and
The Draft Regulations provide that Real Estate Investment qualifications), and independence requirements including
Management Companies (REIMCs) registered with the that at least 50% of REIMC directors are independent and
SEBI can manage schemes under a real estate investment the management of the I-REIT and the management of
trust (i.e. the I-REIT). REIMC must be independent of each other.
All schemes launched by the I-REIT under the Draft Foreign investment:
Regulations will be required to obtain a rating from a • Are there any restrictions on foreign investment in real
credit agency and units of the scheme will have to be estate?
listed.
See “land ownership” above.
The I-REIT must submit certain information to the relevant
stock exchanges and the investors, and comply with Income/profit tax etc:
obligations under listing agreements.
• Is there any tax exemption at the REIT level for the
No I-REIT, under all its schemes, shall have exposure REIT’s income/ profits?
to more than 15% of any single real estate project, and
Tax implications are yet to be settled.
schemes are prohibited from investing in vacant land
or engaging or participating in property development • Is stamp duty applicable?
activities.
Stamp duty rates on conveyance of immovable property
A scheme is required to distribute not less than 90% of its in India are high and depend on the State in which the
annual net after tax income each year. REIT is operational and acquires real estate.
Identify any significant factors that may/will impact • Is withholding tax applicable?
upon the development of the REIT market in the
jurisdiction, such as: Tax implications are yet to be settled.
Title system: We would like to thank our correspondent law firm,

Economic Laws Practice, for preparing the materials in
respect of India.
The Draft Regulations require that the title investigation
and legal documentation of scheme properties shall be
examined by advocates who are on the panel of financial
institutions and scheduled banks who extend housing
loans on mortgage of properties.
In India, the State does not hold a title register nor does it
certify real estate title. This has led to significant litigation
as well as a number of disparate regulatory responses on
ownership of land. These include the Transfer of Property
Act, the Indian Registration Act and the Indian Evidence
Act.

5. INDONESIA duty (payable by the purchaser) will be applicable.
When was the REIT regime introduced? If the seller is a taxable entrepreneur for VAT purposes the
sale of land will also be subject to 10% VAT.
A REIT regime was formally introduced by the Indonesian
Capital Markets and Financial Institutions Supervisory In addition, if the real estate property qualifies as
Agency (Bapepam – LK) on 18 December 2007 by issuing “luxurious properties”, the transfer will also be subject to
four regulations (Regulations) on Real Estate Investment Luxury Goods Sales Tax of 20%. The criteria for “luxurious
Funds (REIF). properties” are as follows:
Is there a regulatory framework and, in particular, a (a) houses and town houses from types of non-strata title
separate regime for REITs apart from that for listed with an area of 350m2 or more; or
(b) apartments, condominiums, town houses, and others
The Regulations allow:
from types of strata title with an area of 150 m2.
(a) a REIF the option to be listed on the Indonesia Stock
Exchange (IDX). Listed REIFs will be subject to the
“Manager”):
listing rules of the IDX;
(b) REIFs to invest only in (i) Indonesian real estate (Real
Estate Assets), (ii) securities of real estate companies External. The Investment Manager establishing the REIF
(which may be listed on the IDX) (Assets related to must be independent from the REIF.
Real Estate), and (iii) cash or cash equivalents; and
(c) REIFs to invest directly or indirectly through a special the more significant criteria for the licence/approval?
purpose company (SPC).
An Investment Manager must be licensed by Bapepam-LK.
In managing REIFs, an Investment Manager must ensure
that the proportion of the REIF’s portfolio is as follows: Foreign investment:
• Are there any restrictions on foreign investment in real
(a) Real Estate Assets must comprise at least 50% of the
estate?
REIF’s Net Assets Value (NAV);
In Indonesia, investment in real estate may be 100% foreign
(b) if the REIF invests in a combination of Real Estate
owned. However, foreign investments in Indonesia must be
Assets and Assets related to Real Estate, then such
through the establishment of an Indonesian limited liability
combination must comprise at least 80% of the REIF’s
company.
NAV, in which the investment in Real Estate Assets
must comply with (a) above; and Income/profit tax etc
(c) investments in cash must not comprise more than 20% • Is there any tax exemption at the REIT level for the
of the REIF’s NAV. REIT’s income/profits?
Have there been recent deals and regulatory or other Indonesian tax regulations do not specifically stipulate any
developments? special tax treatment for REIFs. Normal tax treatment may
Due to the absence of further regulations in the relevant apply to REIFs, and there could be double taxation issues
sectors, recent REIF deals involving properties in Indonesia that would need to be examined on a case-by-case basis.
were effected through offshore REIFs, e.g. an A-REIT in • Is there any tax pass-through to the investors?
Singapore that holds assets in Indonesia through an SPV.
No specific stipulation on tax pass-through to the investors
Identify any significant factors that may/will impact upon for a REIF.
such as: • Are there any other tax incentives for REITs?
Land ownership: No specific tax incentives for a REIF.
• Are there any restrictions on foreign ownership? • Is stamp duty applicable?
Yes. Under Indonesian land regulations, acquisition of title Stamp duty is applicable on documentation sought to be
to real property assets will require a REIF to complete such relied upon in Indonesian courts.
acquisition through an SPC established under Indonesian
law. In general, Indonesian land law requires an individual Currently, the nominal amount of the Indonesian stamp
or an Indonesian legal entity to hold title to land. duty is maximum Rp.6,000. Generally, the stamp duty is
due to be paid when the documents are executed. The
Under Indonesian law, (i) the Government does not stamp duty regulation specifies that the stamp duty for
guarantee land title, and (ii) an Indonesian legal entity documents executed outside Indonesia must be paid at the
is only eligible to acquire leasehold land title from the time the documents are used in Indonesia (post-stamping).
Government for a certain period of time (which varies
depending on the land title involved). • Is withholding tax applicable?
Further, in a property transfer transaction, a 5% final No.
income tax (payable by seller) and a 5% final land transfer

6. JAPAN Applicants for a licence must demonstrate their capability
for asset management.
When was the REIT regime introduced?
Foreign investment:
The REIT regime was introduced by the Law on Investment
Trust and Investment Companies (Investment Trust Law) • Are there any restrictions on foreign investment in real
on 30 November 2000. estate?
Is there a regulatory framework and, in particular, a No. However, more than 50% REIT shares must be held by
separate regime for REITs apart from that for listed domestic investors.
entities in general? Foreign exchange control:
Japanese Real Estate Investment Trusts (J‑REITs) are • Are there any foreign exchange controls?
companies dedicated to owning and operating income- Yes.
producing real estate, including office, residential,
commercial and other buildings. Income/profit tax etc:
J-REITs are subject to high disclosure standards and a • Is there any tax exemption at the REIT level for the
strict structural framework based on laws and regulations, REIT’s income/profits?
including Tokyo Stock Exchange (TSE) listing rules. If a J-REIT pays out 90% or more of its retained earnings as
Currently, all publicly listed J-REITs are of the company dividends, those dividends will be deductible for corporate
type and closed-end (unitholders having no redemption tax purposes.
right).
A J-REIT has no employees and delegates real estate
business operations to an asset management firm, which No.
manages the asset portfolio according to the J-REIT’s
investment policy.
There are tax benefits for individual investors in REITs that
The TSE’s listing criteria for J-REITs focus on the nature,
relate to dividend payments and capital gains. J-REITs pay
proportion and value of real estate assets held within the
a reduced amount of registration tax and property taxes at
J-REIT fund.
the time of acquisition of the property by the J‑REIT.
Have there been recent deals and regulatory or other
developments?
One REIT asset manager set up an unlisted open-ended No.
investment corporation in March 2010. • Is withholding tax applicable?
TSE has accepted REIT acquisition of foreign property. Dividend: Yes.
Tax laws have changed the 90% distribution rule from a Capital Gain: Partly yes. An investor may elect 10%
taxable income test to an accounting retained earning test. withholding tax instead of tax filing.
Seven REIT merger transactions have completed since Identify any other factors may/will impact on the REIT
2010. As a result, the current number of listed J-REIT is 35. industry in the jurisdiction.
Identify any significant factors that may/will impact upon Convertible bonds are not allowed for J‑REITs. Currently,
the development of the REIT market in the jurisdiction, rights issues are very rare in Japan.
such as:
J-REITs may not hold 50% or more shares or interests in
Significant factors. another company or vehicle. One group company may not
The supply of property, property market condition, interest hold 50% or more of REIT shares (a tax law requirement).
rates, J-REIT yield rates, quality of the asset manager,
building quality, taxation of the REIT and property are all Identify alternative vehicles/investment structures.
significant to the development of the market. Theoretically, a trust structure is an acceptable alternative.
Land ownership:
No.
“Manager”):
External.
Yes, a Financial Services Agency (FSA) licence is required.

7. KOREA Licensing/approval of the entity managing the REIT (the
“Manager”):
The Korean REIT (“bu-dong-san-tu-ja-hoe-sa”) (K-REIT)
Self-managed REITs have an internal management
regime is regulated by the REIT Act (the Act) which
structure (that must hold certain qualifications).
came into effect July 2001.
Consigned-managed REITs and corporate restructuring
Is there a regulatory framework and, in particular, a REITs typically outsource their management.
• Does the Manager need to be licensed and what
are the more significant criteria for the licence/
K-REITs are a type of joint stock company (“chusik approval?
hoesa”) and are subject to the Commercial Code and the
Managers must be qualified and this includes experience
Act.
requirements (e.g. worked in relevant fields for five years
There are three types of K-REITs: (i) self-managed REITs; or more) or hold qualifications (e.g. Master’s degree).
(ii) consigned-management REITs; and (iii) corporate
restructuring REITs.
• Are there any foreign exchange controls?
There are minimum capital requirements and operating
a K-REIT requires a licence from the Ministry of Land, Yes. In addition to restrictions on offshore funds
Transport and Maritime Affairs. investing into Korean real estate, and K-REITs that
are treated as a “foreigner” for purposes of the
Generally, K-REITs that meet the listing requirements list Foreigner’s Land Acquisition Act, capital transactions
on the securities market or the Korea Securities Dealers on investments by non-residents in K-REITs are subject
Association (KOSDAQ). A K-REIT cannot invest in a real to reporting requirements under the Foreign Exchange
estate development project until it is listed. Transactions Act.
Have there been recent deals and regulatory or other Income/profit tax etc:
developments?
Following amendments to the Act in 2010, the number REIT’s income/profits?
of K-REITs has grown. As at January 2011, there were
Deductions are available for corporate restructuring or
52 K-REITs in total: 29 corporate restructuring REITs;
consigned-managed REITs. This includes where a K-REIT
12 consigned-management REITs and 11 self-managed
distributes 90% or more of available profits or where a
REITs.
K-REIT pays foreign tax income generated from their
Key developments of the 2010 amendments were: to foreign investment.
lower the minimum capital for incorporation and the
minimum capital requirement; to lower the minimum
public offering requirement until December 31, 2012; to No.
raise the maximum ownership of one shareholder; to
expand the scope of permissible in-kind contributions • Are there any other tax incentives for REITs?
after obtaining the licence; upon shareholders’ exercise Some. A K-REIT shall be entitled to a 30% deduction
of the appraisal right, to allow a REIT to postpone of the acquisition tax on real estate acquired before 31
the purchase with approval from the Ministry of Land, December 2012.
Transport and Maritime Affairs; to diversify ways to
operate excess funds of a development-specialised • Is stamp duty applicable?
REIT; and, to loosen the time limitation on disposition of
Stamp duty is payable by K-REITs’ property acquisitions
domestic housing.
and varies depending on the transaction amount.
These amendments are expected to continue to affect
• Is withholding tax applicable?
the K-REIT industry in Korea.
Withholding tax at 15.4% is withheld and remitted by the
Identify any significant factors that may/will impact
payer of interest income.
upon the development of the REIT market in the
jurisdiction, such as: Identify alternative vehicles/investment structures.
Land ownership: Collective real estate investment vehicles compete with
K-REITs in Korea.
Generally, no. We would like to thank our correspondent law firm, Kim,
Choi and Lim, for preparing the materials in respect of
If 50% or more or the equity of a K-REIT is owned Korea.
by foreign nationals, the K-REIT would be treated as
a “foreigner” for purposes of the Foreigner’s Land
Acquisition Act and would be subject to certain reporting/
permit requirements for land acquisition and may need to
seek prior permission in certain circumstances.

8. MALAYSIA Licensing/approval of the entity managing the REIT (the
“Manager”):
Property funds commenced in the 1980s with Amfirst
An M-REIT must be managed and administered by a
Property Trust Berhad being listed in September 1989 on
management company approved by the MSC.
the-then Kuala Lumpur Stock Exchange (now the “Bursa
Malaysia Securities Berhad” - BMSB). • Does the Manager need to be licensed and what
are the more significant criteria for the licence/
approval?
entities in general? Yes. The REIT Guidelines set out the eligibility criteria of
a management company. Eligibility requirements include
The Malaysian Securities Commission (MSC) is
minimum 30% Bumiputera participation.
responsible for regulating REITS (M-REITs) in Malaysia.
The Securities Commission Act 1993 (SCA) and REIT Foreign investment:
Guidelines (issued by the MSC) establish the regulatory • Are there any restrictions on foreign investment in
framework for the establishment, administration and real estate?
operation of M-REITS in Malaysia. Certain M-REIT
proposals require the approval of the MSC. There are no restrictions applicable to foreigners who
wish to hold units in an M-REIT.
The REIT Guidelines also prescribe the qualifications
of a management company and the trustee, the sale of Foreign exchange control:
units in a REIT, the listing of units (if applicable), the • Are there any foreign exchange controls?
authorised investments of an M-REIT, and the pricing of
units. No.
An M-REIT is also governed by a trust deed which Income/profit tax etc:

constitutes the M-REIT and which incorporates the • Is there any tax exemption at the REIT level for the
covenants required under the SCA and the REIT REIT’s income/profits?
Guidelines. A listed M-REIT must also comply with the
BMSB listing rules. REITs are exempt from tax on all income provided that
at least 90% of their total income is distributed to unit-
Have there been recent deals and regulatory or other holders. Otherwise, the REIT will be subject to income
developments? tax at the rate of 25%. An M-REIT’s income will also be
taxed at the unitholder level.
Sunway REIT, listed on 8 July 2010, is the largest REIT
in Malaysia with market capitalisation of RM2.68 billion. • Are there any other tax incentives for REITs?
CapitaMalls Malaysias Trust listed on 16 July 2010.
Companies which own new and/or upgraded existing
buildings awarded the Green Building Index (GBI) will
The revised Guidelines introduced in 2008 afford more
be given a tax exemption equivalent to 100% of the
flexibility to REIT managers, in particular providing
additional capital expenditure incurred to obtain the
greater investment flexibility in foreign real estate and
certificate. This can be set off against 100% of the
real estate not wholly-owned or controlled by the REIT.
statutory income for each year of assessment (only
The MSC has also provided measures to strengthen
available for the first GBI certificate issued in respect of
investor protection by promoting higher standards of
the building).
market conduct.
Identify any significant factors that may/will impact
upon the development of the REIT market in the Instruments of transfer of real property from individuals
jurisdiction, such as: or companies to M-REITs is exempt.
Effective from 1 January 2009 to 31 December 2011,
Foreign ownership of land in Malaysia is statutorily the final withholding tax rate imposed on foreign
regulated under the National Land Code 1965. The institutional investors and non-corporate investors,
Economic Planning Unit (EPU) also regulates the including all individuals and other resident entities, is
acquisition of properties by foreigners. Subject to 10%. The tax rates for non-resident companies (which
some limited exceptions, prior State Authority approval are not institutional investors), and resident companies is
is typically required for the transfer of any interest 25% from year of assessment 2009 onwards.
in alienated land to a trust where one or more of the
beneficiaries is a foreigner. However, in the context of
M-REITs, such approval may not be strictly required for
the reason that the M-REIT investors do not have a right
to the underlying properties. Prior approval of the EPU
is not required where the property is acquired by an
M-REIT approved by the MSC.

9. SINGAPORE the trustee will have to be approved and meet certain
requirements including paid-up capital, shareholders funds
When was the REIT regime introduced? and compliance systems.
The Monetary Authority of Singapore (MAS) issued
Manager: There is a separate licensing regime for S-REIT
regulations governing REITs in 1999. In 2001, qualifying
REITs were granted tax transparency treatment – i.e. the Managers under the SFA. The Manager of a fund constituted
REIT trustee is not subject to tax on qualifying income. The as a CIS (and listed on the SGX) must hold a capital
first REIT (S-REIT) was listed in 2002. market service (CMS) license for REIT management (or be
exempted under one of the licensing exemptions) where the
Is there a regulatory framework and, in particular, a fund invests only in real estate and real estate-related assets,
separate regime for REITs apart from that for listed entities and comply with the MAS’s Guidelines on Fit and Proper
in general? Criteria. An S-REIT Manager must comply with minimum
Trusts investing in real estate are typically established as a criteria to obtain a CMS license. A representative of the REIT
business trust (BT) under the Business Trusts Act (BTA) or Manager must hold a representative’s license.
a recognised/authorised collective investment scheme (CIS)
Foreign investment:
under the Securities and Futures Act (SFA).
Under the BTA, the proposed Trustee-Manager of the BT estate?
must apply for the BT to be registered with the MAS. The
business operations of the BT are not subject to borrowing See “land ownership” above.
limits or operational restrictions.
Income/profit tax etc:
S-REITs must be approved by MAS to operate under the For qualifying S-REITs, distributions to an individual who
BTA regime and to be allowed to use the term “Real Estate has not derived income from a Singapore partnership or
Investment Trust”. from the carrying on of a trade, business or profession are
Funds established as a CIS under the SFA must be exempt from tax in the hands of such unitholders.
authorised and have the trust deed approved by the MAS. Distributions to a non-resident person (other than an
Restrictions on the fund’s investment decisions are imposed individual) without a permanent establishment in Singapore
by the Code on Collective Investment Schemes (CIS Code).
are taxable at the rate of 10% in the hands of such
Have there been recent deals and regulatory or other unitholders.
developments?
Distributions to a non-resident person (other than an
Recent deals include the proposed acquisition by Capital individual) with a permanent establishment in Singapore but
Mall Trust of Clarke Quay for S$268million, the acquisition who has not used funds from that permanent establishment
of Macquarie Prime REIT (renamed Starhill Global REIT) by to invest in the S-REIT are taxable at the rate of 10% in the
YTL Corporation Bhd, and AIMS AMP Capital Industrial REIT’s hands of such unitholders.
acquisition of four industrial properties and listing of Shari’ah-
compliant Sabana REIT on the Singapore Stock Exchange. In all other cases, distributions are taxable at normal rates.
The Singapore Code on Takeovers and Mergers and the • Is there any tax exemption at the REIT level for the
licensing regime set out in the SFA, now also applies to REIT’s income/profits?
S-REITs and their managers.
See above.
the development of the REIT market in the jurisdiction, • Is there any tax pass-through to the investors?
such as: See above.
Land ownership:
Qualifying S-REITs and wholly-owned Singapore subsidiaries
Certain restrictions exist in relation to residential property of qualifying S-REITs can enjoy income tax exemption on
under the Residential Property Act . certain foreign-sourced income until 31 March 2015.
Licensing/approval of the entity managing the REIT (the • Is stamp duty applicable?
“Manager”):
• Is the Manager external or owned by the REIT? Until 31 March 2015, qualifying S-REITs enjoy stamp duty
remission on the transfer of Singapore immovable property
Generally, a fund opting for the BT regime will have a single and the transfer of 100% of the issued share capital of a
Trustee-Manager, (a locally incorporated company) with the Singapore-incorporated company that holds immovable
roles of safeguarding the interests of the trust’s investors properties situated outside Singapore.
and managing the S-REIT.
In all other cases, normal stamp duty rules apply. Stamp
The SFA requires that a fund established as a CIS has a
manager and independent trustee. duty rates for transfers of Singapore immovable property
range from 1% to 3%.
more significant criteria for the licence/approval? • Is withholding tax applicable?
Trustee: if a fund is established as an authorised CIS, See “income/profit, tax etc” above.

10. TAIWAN A Manager is not required to be specially licensed or
approved, however the RESA and the Rules Governing
When was the REIT regime introduced? the Qualification of Real Estate Management Institution
Appointed by Trustee and the Required Provisions
The Real Estate Securitisation Act (RESA) was enacted in
to be Set Out in the Mandate (Rules) contain certain
July 2003 and amended on 21 January 2009. It permitted
requirements, including specifying the Manager must be
establishment of closed-end funds; open-end funds still
a corporate, a member of a commerce association and
require regulatory approval.
defines the type of enterprise a Manager may conduct,
The RESA allows two structures for REITs in Taiwan: certain minimum capital required, and that the Manager or
its major shareholder (holding at least 50% of the shares in
• Real Estate Investment Trust (REIT): this follows the US the Manager) must have at least three years’ experience in
model, which requires the establishment of a mutual real estate investment or management.
fund; and
Foreign investment:
• Real Estate Asset Trust (REAT): this follows the nature
of Japan’s special purpose trust. • Are there any restrictions on foreign investment in real
estate?
separate regime for REITs apart from that for listed A foreigner may invest in beneficiary certificates of a
entities in general? Taiwan REIT after registration with the Taiwan Securities
Exchange through a local agent.
The regulator for Taiwan REITs is the Financial Supervisory
Commission (FSC). A publicly traded REIT must also A foreign company may establish a Taiwan branch or
be approved by the Bureau of Securities and Futures. A Taiwan subsidiary to invest in Taiwan real estate directly.
REIT that raises funds overseas and invests those funds in
domestic real estate must also be approved by the Central
Bank of China (Taiwan). • Is there any tax exemption at the REIT level for the
REIT’s income/profits?
Under the RESA, a trustee creates a REIT or a REAT and
may offer beneficiary certificates to investors under a No.
REIT/REAT plan and prospectus. Once established, they
may acquire real estate properties and engage in permitted • Is there any tax pass-through to the investors?
investment activities. Yes.
A REIT/REAT must be structured in the form of a trust. • Are there any other tax incentives for REITs?
The trustee of a REIT/REAT must be a trust enterprise The issuance and transfers of beneficiary certificates of
pursuant to the Trust Enterprise Law, and is responsible Taiwan REITs are exempted from the securities transaction
for structuring and managing the REIT/REAT. Commercial tax. Any distribution made by a Taiwan REIT to its
banks licensed to carry on a trust business are qualified to beneficiaries is subject to withholding tax, currently 10%
be REIT/REAT trustees. for domestic beneficiaries and 15% for foreign beneficiaries,
Have there been recent deals and regulatory or other and will not be included in the consolidated income of the
developments? beneficiary. This tax treatment creates significant benefits
to the beneficiaries as an individual's marginal tax rate is
The RESA was amended on 21 January 2009, permitting real up to 40%, a domestic corporate entity's is up to 17%, and
estate under development to qualify as REIT/REAT assets. a foreign corporate entity’s is up to 20%.
Identify any significant factors that may/will impact upon • Is stamp duty applicable?
such as: Acquisition of real estate is subject to stamp duty.
• Are there any restrictions on foreign ownership? A Taiwan REIT is required to distribute at least 90% of
distributable income to its beneficiaries each year, and the
Foreigners are prohibited under the Land Law from owning dividends are subject to a flat withholding tax of 10% for
certain types of land, however a REIT/REAT will rarely domestic beneficiaries and 15% for foreign beneficiaries.
invest in those land types. Most REITs/REATs assets are
residential or commercial lands or buildings, which can be
owned by foreigners under Taiwanese laws.
“Manager”):
External – A professional institution appointed by the
trustee.

11. THAILAND Yes. There are detailed foreign investment restrictions. These
include prohibitions in relation to land trading businesses,
When was the REIT regime introduced? hotels and condominium projects.
There is no REIT regime in Thailand, however the Thailand Income/profit tax etc:
Securities and Exchange Commission (TSEC) has issued draft
regulations regarding REITs (Draft Regulations). • Is there any tax exemption at the REIT level for the
Is there a regulatory framework and, in particular, a separate
regime for REITs apart from that for listed entities in Thai REITs are not subject to Thai Income Tax since they are
general? not considered to be a tax unit under the Revenue Code.
Under the Draft Regulations, Thai REITs established in • Is there any tax pass-through to the investors?
Thailand are subject to the rules of the TSEC and must Pending finalisation.
be listed property trusts. The TSEC has indicated that the
regulations will likely be finalised by the end of the second • Are there any other tax incentives for REITs?
quarter of 2011.
Pending finalisation.
Trusts are regulated by the Trust for Transaction in Capital
Market Act B.E. 2550 (2007) (TCMA).
Pending finalisation.
Have there been recent deals and regulatory or other
developments? • Is withholding tax applicable?
The TSEC has consulted on the Draft Regulations, the aim Pending finalisation.
of which is, among other things, to provide the process for
the establishment of Thai REITs and to set out permissible
investments for Thai REITs.
the development of the REIT market in the jurisdiction, such
as:
Land ownership:
Yes. Subject to the conditions and procedures prescribed in
Ministerial Regulations and with the permission of the Minister
of the Interior, foreigners may own land. Other foreign land
ownership exceptions exist but are subject to not more than
49% of the shares in the company being owned by foreigners.
“Manager”):
External. The Draft Regulations require a REIT trustee to
appoint a “REIT Management Company”, which cannot be a
related party of that trustee.
The TCMA and the Draft Regulations require that a REIT
trustee have certain qualifications, including being a
commercial bank or financial institution holding a minimum
registration amount, and holding a relevant license from
TSEC.
A REIT Management Company must hold a license, however
as the Draft Regulations are yet to be finalised the criteria
for holding such a license have not been settled. In their
form at the time of writing, the Draft Regulations require
that the REIT Management Company meet certain relevant
experience requirements, be approved by TSEC, and not be a
related party of the REIT trustee.
Foreign investment:
estate?

12. THE PHILIPPINES Philippines residency office, and director composition and
experience requirements.
Foreign investment:
The Philippine REIT Act (REIT Act) became law in
December 2009 and took effect in February 2010. The • Are there any restrictions on foreign investment in real
implementing rules and regulations of the REIT Act estate?
were issued by the Philippine Securities and Exchange Only Philippine citizens and corporations or partnerships
Commission in May 2010 (REIT Implementing Rules). At the which are at least 60%-owned by Philippine citizens may
time of writing, the Philippine Bureau of Internal Revenue own land. Pursuant to this restriction under the Philippine
had yet to issue the regulations on the tax incentives Constitution, the REIT Act provides that a P-REIT that
granted under the REIT Act. The regulations will likely be owns land cannot have foreign equity in excess of 40%.
issued in the second or third quarter of 2011.
separate regime for REITs apart from that for listed • Is there any tax exemption at the REIT level for the
entities in general? REIT’s income/profits?
As of the time of writing, no REIT (P-REIT) has yet been There is no tax exemption at the P-REIT level for the
launched in the Philippines. The likely REIT sponsors are P-REIT’s income/profits. However, the tax base for
awaiting the issuance of the tax regulations on REITs. computing the regular corporate income tax (at 30%) of
a P-REIT is smaller than that of an ordinary corporation.
A P-REIT must be organised as a Philippine corporation A P-REIT is required to annually distribute as dividends at
and listed on the Philippine Stock Exchange to be eligible least 90% of its distributable income (which distribution is
for the tax incentives under the REIT Act. deducted for purposes of computing the P-REIT’s taxable
Upon and after listing, a P-REIT must have at least 1,000 net income). Hence the P-REIT is effectively taxed on only
public shareholders (defined in the REIT Act) each owning 10% of its income.
at least 50 shares of any class, and who, in the aggregate, • Are there any other tax incentives for REITs?
own at least one-third of the outstanding capital stock of
the P-REIT. Dividends distributed by a P-REIT are subject to final tax
at the uniform rate of 10%, except if the recipient is already
As a listed company, the P-REIT is also subject to the exempt from tax on dividends or subject to a lower tax rate
disclosure and reporting requirements under the Philippine under existing laws or applicable tax treaty.
Securities Regulation Code and the rules of the Philippine
Stock Exchange. Certain other incentives include an exemption from the 2%
minimum corporate income tax and a P-REIT is subject to
Identify any significant factors that may/will impact upon only 1% creditable withholding tax on income payments
the development of the REIT market in the jurisdiction, received from sales or leases. Ordinary corporations are
such as: generally subject to creditable withholding tax at varying
Land ownership: rates depending on income payment, for example, the
gross selling price for sale of real property classified as
• Are there any restrictions on foreign ownership? ordinary asset is between 1.5% and 5%, and 5% on gross
rentals.
A P-REIT that owns land cannot be more than 40% foreign-
owned. • Is stamp duty applicable?
Licensing/approval of the entity managing the REIT (the A P-REIT is subject to documentary stamp tax (DST) on
“Manager”): issuance of listed investor securities (the rate of DST is
0.5% on total par value of shares issued to investor).
The transfer of real property to a P-REIT is subject to only
The REIT Act requires the P-REIT manager to be
50% of the DST and registration and annotation fees that
“independent” from the P-REIT and the P-REIT sponsor.
would otherwise apply.
Independence requirements will be prescribed in the
implementing rules and regulations. • Is withholding tax applicable?
• Does the Manager need to be licensed and what are Certain types of income are subject to withholding tax.
the more significant criteria for the licence/approval? The person making a payment remits the payment to the
Government.
The REIT Implementing Rules contemplate the licensing of
the fund manager.
The REIT Act provides certain key requirements for a
P-REIT Manager, including that it: must be a Philippines
corporation or a foreign corporation engaged in the
business of fund management and of proven track record
and duly licensed to do business in the Philippines by the
appropriate regulatory agency; have minimum paid-up
capital stock; comply with certain, corporate governance
and independence requirements; and, meet certain

13. VIETNAM Have there been recent deals and regulatory or other
developments?
In January 2011, the Ministry of Construction submitted
At the time of writing, there was no REIT regime in Vietnam. The Housing Proposal for the Government’s approval. The
The concept of a trust does not exist in Vietnam’s Civil Housing Proposal recommended a number of solutions to
Code as it does in many common law jurisdictions. However, solve the constraints on capital mobilisation in Vietnam’s
given the increasing demand for capital to supplement real estate market. Specifically, among other financial
commercial bank debt for property development, the suggestions, the Housing Proposal suggested deploying
concept of a REIT structure has been officially included in REITs as a mechanism to mobilise capital for Vietnam‘s real
a proposal prepared by Ministry of Construction in January estate market.
2011, and is awaiting the Government’s approval of the
It is anticipated that once the Housing Proposal is approved,
Proposal on Housing Development Strategies up to 2020,
the Government will kick off the process of building a legal
with a vision to 2030 (The Housing Proposal).
framework for REITs in Vietnam.
Meanwhile, on 24 November 2010, the Securities Law was
amended (Amended Securities Law), with effect as of 1 July
2011, providing a short definition of Real Estate Investment
such as:
Fund (REIF). Specifically, “Real Estate Investment Fund”
means a “securities investment fund which is substantially Title system:
invested into real estate”.
Although the Amended Securities Law does not provide of property for investment by a REIT?
any specific provisions governing Real Estate Investment
Yes. Vietnam does not have a system of title insurance, and
Funds, there are already a couple of analogous forms of
security interests in real estate are not readily searchable in
doing business in Vietnam which can be used for achieving
public registries.
objectives substantially similar to a REIT, as follows:
Land ownership:
(i) real estate companies, which are established and
operated under the Investment Law, the Enterprise • Are there any restrictions on foreign ownership?
Law, the Land Law, the Law on Real Estate Business
Yes. Foreign entities incorporated abroad are not allowed to
(LREB) and the Law on Residential Housing; and
own land use rights in Vietnam.
(ii) offshore funds specialising in Vietnam property
Foreign-owned companies established in Vietnam can only
investments. Some of these structures focus on
lease land from the State or receive a contribution of land
property investments with recurring income streams,
use rights from a Vietnamese member/shareholder in order
as a REIT would.
to acquire land use rights in Vietnam.
Vietnam’s first real estate investment fund, Indochina Land
Holding, was announced in 2005 and is an offshore fund
“Manager”):
managed by Indochina Capital. It has mainly invested in
residential, office and hotel projects. In Vietnam, fund management companies must be
registered with the State Securities Commission (SSC).
separate regime for REITs apart from that for listed entities • Is the Manager external or owned by the REIT?
in general?
External. The Manager and the fund should be independent
There are currently no REIT-specific provisions in Vietnam, entities.
apart from the legislation mentioned above. However, it is
worth noting the following points:
Amended Securities Law
Yes. The Manager must obtain the operating license issued
• Under the Securities Law, a public fund is not allowed by SSC, meeting certain requirements including a minimum
to use more than 10% of its capital and assets to invest capital level, a 20% founding shareholder stake to be held
in real estate and an open (public) fund is not allowed for three years, that Manager directors and at least five
to invest in real estate. other employees must be licensed as fund managers by the
SSC, and must hold minimum experience and qualification
• Under the Amended Securities Law (effective from 1 requirements.
July 2011), this limitation of 10% will be withdrawn with
respect to REIFs. Foreign investment:
• A closed (public) fund is not allowed to invest more • Are there any restrictions on foreign investment in real
than 10% of its total asset value in real estate. estate?
LREB Yes. Under the LREB foreign-owned companies are not

allowed to buy or lease existing domestically-owned
• Under the LREB, onshore and offshore investors properties for resale or sub-lease purposes. They are
are required to establish real estate companies or allowed to develop, own and sell real property in Vietnam.
cooperatives to develop and/or acquire real properties. Other restrictions are covered in “land ownership” above.

income/profit tax etc:
Vietnamese investments of offshore incorporated funds are
subject to various domestic taxes.
For domestic securities investment funds, the fund itself is
not subject to enterprise income tax. However, corporate
investors pay 25% enterprise income tax on distributed
profit (with exemption for income taxed at the investee
companies) and individual investors pay 5% personal
income tax.
No.
For offshore funds, there is no tax pass-through to the
investors. For domestic securities investment funds, see
above.
• Are there any other tax incentives for REIT?
There is no tax incentive for income from transfer of real
estate and income from asset leasing.
Not applicable.
• Is withholding tax applicable?
Not applicable.

CONTACT US
FOR FURTHER INFORMATION, PLEASE CONTACT:
Baker & McKenzie

www.bakermckenzie.com The Trust Company
www.thetrustcompany.com.au
Milton W. M. Cheng
Partner, Hong Kong Andrew Cannane
E: milton.cheng@bakermckenzie.com Genral Manager, Corporate Clients
P: +852 2846 1056 E: acannane@thetrustcompany.com.au
P: +61 2 8295 8358
Rodney Stone
Partner, Sydney Sin Li Choo
E: rodney.stone@bakermckenzie.com Managing Director, Singapore
P: +61 2 8922 5201 E: lsin@thetrustcompany.com.au
P: +61 2 8295 8358
Roy Melick
Partner, Sydney Glen Dogan
E: roy.melick@bakermckenzie.com Senior Vice President, Singapore
P: +61 2 8922 5138 E: gdogan@thetrustcompany.com.au
P: +61 2 8295 8358
Stephanie Magnus
Associate Principal
Baker & McKenzie, Wong & Leow, Singapore
E: stephanie.magnus@bakermckenzie.com
P: +65 6434 2672
Background, Respondents Profle and Survey Results sections ©The Trust Company 2011. All rights reserved.
Country Summary and Legal Update sections ©Baker & McKenzie 2011. All rights reserved.
The Country Summaries and Legal Update in this Survey have been prepared by Baker & McKenzie offices in each jurisdiction named in
this Survey, except for Korea and India, which were prepared by our correspondent law firms Kim, Choi and Lim (in respect of Korea), and
Economic Laws Practice (in respect of India).
This Survey has been prepared for clients and professional associates of Baker & McKenzie and The Trust Company. Whilst every effort has
been made to ensure accuracy, no responsibility can be accepted for errors and omissions, however caused. The information contained in this
publication should not be relied on as investment, taxation or legal advice and should not be regarded as a substitute for detailed advice in
individual cases. No responsibility for any loss occasioned to any person acting or refraining from action as a result of material in this Survey is
accepted by individual authors, Baker & McKenzie or The Trust Company. If advice concerning individual problems or other expert assistance is
required, the services of a competent professional adviser should be sought.
Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used
in professional service organisations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly,
reference to an “office” means an office of any such law firm.
This publication is copyright. Apart from any fair dealing for the purposes of study or research permitted under applicable copyright
legislation, no part may be reproduced or transmitted by any process or means without prior written permission of Baker & McKenzie and The
Trust Company.
The law is stated as at March 2011, unless otherwise indicated.


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ASIA-PACIFIC

VIETNAM THE PHILIPPINES

2 | Asia-Pacific REIT Survey 2011

Welcome to the fifth edition of the Asia-Pacific REIT Survey. WELCOME 3

The Trust Company is delighted to again partner with Asia-Pacific’s ABOUT US 4

In our last REIT Survey, published in June 2010, we saw dramatic

However, while growth prospects appear good, the Asia-Pacific

John Atkin Milton Cheng

1. Source: IP, Real estate March/April 2011

ABOUT THE TRUST COMPANY ABOUT BAKER & MCKENZIE

*as of 31 March 2011

4 | Asia-Pacific REIT Survey 2011

In order to develop a better understanding of the REIT DATA INTERPRETATION

2. Market growth: which markets offer the best prospects

The on-line survey was undertaken between 24 January

The Trust Company and Baker & McKenzie | 5

A total of 137 respondents completed the survey, about the

The quality of the sample is excellent in that the 109

The profile of respondents is similar to previous years. Key

Australian 67% Singaporean 13%

6 | Asia-Pacific REIT Survey 2011

Fund manager 31 % Tax/Acc’t

International 58% Local 42%

30-40 years - 28%

40+ years - 70%

The Trust Company and Baker & McKenzie | 7

1. WHICH ASSET CLASS OFFERS THE BEST

The recovery from the global financial crisis that

The Commercial Office sector has the highest rating (67%).

Healthcare is also at its highest level (60%) since the

Residential has declined slightly to 54% but is still

2007 2008 2009 2010 2011

8 | Asia-Pacific REIT Survey 2011

China (73%) has increased by 5%, back to pre-GFC levels,

Singapore has shown growth of 9% to rank third at its

2007 2008 2009 2010 2011

The Trust Company and Baker & McKenzie | 9

REIT opportunity prospects have improved across the

Australia, at its highest ever level, (up 6% to 66%) is now

China has shown a slight decline (1%) to 57% but retains

The biggest increases were Malaysia (up 8% to 51%),

2010 newcomers Philippines (up 3% to 40%) and Thailand

2007 2008 2009 2010 2011

10 | Asia-Pacific REIT Survey 2011

Ratings of Regulatory Support have improved, overall, by

Greatest increases were in Singapore and Hong Kong (7%),

Singapore (77%) is still ranked as the highest in regulatory

Hong Kong is ranked a distant third (61%) with Japan

Vietnam (37%), India (36%) and Indonesia (34%) ranked

100 Regulatory Support – Ratings Trend – 2007-2011

2007 2008 2009 2010 2011

The Trust Company and Baker & McKenzie | 11

1. Property market growth

Country Rating 2011

Overall “Potential” ratings have improved by 5% to 52%

Greatest increases were in Malaysia (8%), Singapore (7%)

Singapore (69%) is still rated as the highest overall with

Indonesia (44%), Philippines (43%) and Thailand (43%)

12 | Asia-Pacific REIT Survey 2011

Singapore Rating +/- Ranking Ratings Distribution (%)

Australia Rating +/- Ranking Ratings Distribution (%)

Hong Kong Rating +/- Ranking Ratings Distribution (%)

The Trust Company and Baker & McKenzie | 13