Singapore's REIT market expected to grow 200% in five years

Singapore's S$10 billion ($6.4 billion) real estate investment trust industry may triple in market value in the next five to 10 years as more assets become available, the city-state's biggest developer said.

CapitaLand, which manages three of Singapore's 13 property trusts, said tax breaks and other incentives helped boost investor interest in the industry. The developer sold shares in the first Singapore REIT, CapitaMall Trust, in 2002.

Singapore has “deregulated our rules and regulations,” Liew Mun Leong, CapitaLand's chief executive officer, said in an interview. “There are a lot of properties and assets that can be put into REITS. If we have our way, we can do much more.”

Singapore will probably retain its lead over Hong Kong as the biggest REIT market in Asia excluding Japan and Australia in the next four years because it has the most “liberal” tax policies globally, Goldman Sachs Group said in June. The city-state decided to forgo taxes for REIT payouts to individuals and cut taxes on dividends for overseas investors.

Singapore developers are adding variety to REIT assets to continue attracting investors. Property prices are rising as well. But for how long? Is it a bubble waiting to burst?

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