2021 Q2 - Members Exclusive - APREA Asia
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2021 Q2
Members Exclusive
Construction activity pause
• to ensure the safety or security of the construction site
From Monday 12:01am on 19 July
2021, work at construction sites in • to deal with environmental risks
Greater Sydney including the Blue • to maintain and ensure the integrity of critical plant,
equipment or assets, including partially completed works, that
Mountains, Central Coast, Wollongong would otherwise deteriorate
and Shellharbour, is not to be carried • to receive deliveries of supplies that would otherwise
deteriorate
out unless the work is urgently required
• to maintain public utilities
• to ensure the safe operation of existing transport
infrastructure
NDRC has made a new
announcement for
China Infrastructure
REITs on 2 July
The new announcement for C-REITs has
added more items for the REITs pilot program;
the main extensions are below:
1 Extension of the areas for the pilot program to Requirements for the fund raised from
5
all among China, as long as the underlying REITs, 90% of the fund raised from the
assets are qualified to apply. The last version REIT needs to be used for the new-
only includes certain areas like Beijing-Tianjin- build projects after the IPO.
Hebei Region, Yangtze River Delta, The
6 Release the REIT underlying asset
Greater Bay Area, and Hainan Province, etc.
requirement that with at least 3-year
Extension of the asset sectors: including the operation, those with shorter operation
2 period asset could still apply for the
new energy sector, like electric power, wind
power, solar power, etc. Affordable Housing REITs if the asset can generate long-
sector; Water Conservancy project; Qualified term stable income.
Tourism assets; Car Parks etc.
Clarify the compliance items for the
7
Increase the minimum requirement for the land and asset-transition.
3
IPO to RMB 1 Billion, and the REIT needs to
Adjust the requirements for the service
double the value amount of assets of the IPO 8
providers of the REITs projects, set up
if the REIT wants to acquire new assets after
stricter standards for compliance of
listing.
the service providers, and more
Reducing the processes for application and stringent policy for changing the
4 verification, the local NDRC department can service providers.
submit directly to the NDRC in the central
government once they verify, which will save
time for too many levels of verifications,
compared with the past.
Grant scheme for
OFCs and REITs in
Hong Kong
As one of our initiatives to strengthen the Effective 10 May 2021, the grant scheme
competitiveness of Hong Kong as a global covers 70% of eligible expenses incurred in
asset and wealth management centre and setting up an OFC or listing a REIT in Hong
a preferred fund domicile, we worked Kong, subject to a cap of $1 million per
closely with the Government to introduce a OFC and $8 million per REIT. Administered
three-year grant scheme to subsidise the by the SFC, the scheme strengthens Hong
formation of OFCs and listing of REITs in Kong’s asset and wealth management
Hong Kong. industry by encouraging the use of the OFC
structure and broadening the REIT market.
India’s SEBI reduces the
trading lot size for REIT and
InvITs to enhance liquidity
On 29th June 2021, the Securities and The past two years have seen
Exchange Board of India (SEBI) unprecedented success REITs and
amended the REIT and InvITs InvITs in India with 3 REITs and 8 InvITs
regulations reduced the minimum with more like commercial real
subscription size to a range of estate, roads, gas pipeline, digital
₹10,000-15,000 and revised the fibre, power transmission and
trading lot down to one unit from 200 renewables vying for these
units. Currently, while making an initial instruments. With the Indian
public offer and follow-on offer, government looking to monetise
minimum subscription should not be more than 100 assets drawing in more
less than ₹100,000 for InvITs and than USD 33 billions of investments,
₹50,000 for REITs. underlines the potential that REITs and
This move is expected to make REITs InvITs can offer.
and InvITs accessible to many retail
investors and bring in more liquidity
through increased trading volumes.
SGX launches world's first
ESG Reit derivatives
THE Singapore Exchange (SGX) on The underlying Nikkei ESG-Reit Index uses
Monday launched what it has called the tilt methodology to adjust the weights of
world's first environment, social and its constituents, using ESG ratings as
governance (ESG) real-estate investment evaluated by GRESB, the global ESG
trust (Reit) derivatives. benchmark for real assets.
The new SGX Nikkei ESG-Reit Index Futures This index consists of 60 Tokyo-listed
contract aims to meet rising demand for stocks, which make up nearly all of the
integrating ESG considerations into US$160 billion market capitalisation of
investment portfolios, the Singapore Japan's listed Reit securities market.
bourse operator said in a statement. The launch deepens SGX's decades-long
It added that the derivatives will fast- partnership with Nikkei Inc, Japan's
track access to the growing Japanese flagship news organisation and index
Reit sector for global asset managers and calculator. Their collaboration began
investors. with the historic introduction of the SGX
In the statement, SGX head of equities Nikkei 225 Index Futures in 1986.
Michael Syn noted "strong investor SGX shares rose 1.5 per cent or S$0.16 to
demand for yield, deep liquidity and close at S$10.71 on Monday, before the
keen issuer participation". announcement.
Implications of the G-7
Land Betterment
Global Minimum Corporate
Charge Act 2021
Tax for Singapore
The Land Betterment Charge Act was Singapore has long been known for its
passed in Parliament on 10 May 2021, attractive corporate tax rates, but this tax
published in the Government Gazette 8 advantage may be whisked away once
June 2021 and will come into operation the landmark tax agreement by the
on a date gazetted by the Minister for Group of Seven ("G-7") comes into effect.
Law. . The Act provides for the imposition
of a tax (called a Land Betterment The G-7 represents a huge proportion of
Charge or "LBC") on the increase in the global gross domestic product (GDP) and
value of land resulting from a global net wealth, being comprised of the
chargeable consent given in relation to seven countries of Canada, France,
land. Germany, Italy, Japan, the United
Kingdom, and the United States. On 5
Under the existing framework, June 2021, the G-7 sent ripples worldwide
landowners and developers currently when it reached a deal to implement two
have to pay either a Development sets of rules, namely (a) reallocating
Charge, Temporary Development Levy taxable profits of the largest multinational
or a Differential Premium to either the enterprises ("MNEs") to "market
Urban Redevelopment Authority or the jurisdictions" where their customers are
Singapore Land Authority ("SLA") where located, and (b) a global minimum tax
there is an enhancement in land value rate of 15% for large MNEs.
for various reasons.The LBC would The agreement has multiple aims, ranging
replace the DC, TDL and DP and would from modernising tax laws for the digital
be payable to a single entity, economy, to avoiding a "race to the
consolidating these charges and taxes bottom" with countries offering
under SLA. progressively lower tax rates to attract
MNEs, to closing cross-border tax
The Act sets out the framework for the loopholes.
operation of the LBC, including the rules
for calculating the appliable tax, who is While there is no clear indication on when
liable for payment, and how the this agreement might come into play and
obligation is to be satisfied and what the specific rules will entail, it will
enforced. In this Seminar, Rajah & Tann have far-reaching implications beyond
will highlight the key features of the Act the borders of the G-7 countries. The G-7
and the LBC regime and how it differs agreement may further set the stage for
from the current regime, as well as what similar deals, such as amongst the Group
developers should be aware of of 20 ("G-20") or the more than 130
regarding their liability for payment of countries under the Organization for
LBC. Economic Cooperation and
Development Inclusive Framework.
However, China as a member of the G-20
has already voiced objections to a global
minimum corporate tax rate
Extension to Temporary Relief
Measures for Property Sector due
to Coronavirus Disease 2019
(COVID-19) Pandemic
The Government announced on 28 June All housing developers will continue to be
2021 an extension to the temporary relief subject to the prevailing ABSD regime.
measures for property developers affected Qualifying housing developers will have a 6-
by disruptions to construction timelines, as month extension of the remission condition
border measures were tightened from April timelines for commencement and
and May 2021 because of a resurgence in completion of the residential development
COVID-19 infections. These are in addition to projects. There is no further extension of the
the temporary relief measures announced remission condition timeline for the sale of
on 6 May 2020 and 8 October 2020. These all housing units in the residential
temporary relief measures do not alter the development project.
existing residential property market cooling
measures which remain to ensure that The extension to the measures will provide
private residential property prices are targeted relief to developers in the near
broadly consistent with economic term with regard to the construction
fundamentals. timeline-related requirements of the PCP,
ABSD regime and QC regime. The
The extension to the temporary relief Government will continue to support
measures, to be implemented with developers and contractors in their efforts
immediate effect, are: to complete development projects in a
timely manner, while ensuring compliance
a) Extension of the Project Completion with safety measures. With the extension to
Period ("PCP") by 6 months for qualifying the measures, the Government expects
residential, commercial and industrial developers to similarly provide relief and
development projects; support to their main contractors and
b) Extension by 6 months for the consultants. The Government will also
commencement and completion continue to closely monitor the
timelines of residential development normalisation of activities in the construction
projects in relation to the remission of the industry, and on the property sector. The
Additional Buyer's Stamp Duty ("ABSD") for Government will continue to support the
qualifying housing developers; and stakeholders as necessary and appropriate,
c) Extension of the PCP by 6 months for as we transition to a new normal where
residential development projects under COVID-19 becomes endemic.
the Qualifying Certificate ("QC") regime
for qualifying foreign housing developers.
Refinements to Criteria for
Publicly Listed Housing
Developers with Substantial
Connection to Singapore to
be Exempted from Qualifying
Certificate Regime
On 29 June 2021, the Ministry of Law (i) the shares are held through a whitelisted
("MinLaw") announced that it had made nominee company; and (ii) the
refinements to the criteria for exemption Singaporean substantial shareholder(s)
from the Qualifying Certificate ("QC") regime retains control over the voting rights to the
for publicly listed housing developers with a shares through the whitelisted nominee
substantial connection to Singapore. company (the whitelist of approved
nominee companies if published on SLA’s
Under the Residential Property Act, any website atwww.sla.gov.sg and the list will be
housing developer that is not considered a reviewed and updated from time to time).
Singapore company must apply for a QC
when it purchases residential land for b) ollective interest held by members of the
development, other than from the same family - A housing developer will be
Government. MinLaw had announced last considered to have a significantly
year that with effect from 6 February 2020, Singaporean substantial shareholding
publicly listed housing developers can apply interest if Singaporean shareholders from
for exemption from the QC regime on the the same family collectively form the largest
basis that they have a substantial substantial shareholder and hold at least
connection to Singapore (press release 30% interest in the total voting rights and
availablehere). One of the criteria which issued shares in the company. This is
applications will be assessed by reference to provided that at least one of the
is whether there is asignificantly Singaporean shareholders in the family is a substantial
substantial shareholding interest in the shareholder (and identified clearly as the
company. primary shareholder), and the largest single
foreign substantial shareholder must hold
MinLaw has made two refinements to how not more than 30% of the voting rights and
the shareholding interest criterion is assessed, issued shares in the company.
implemented with immediate effect from 29
June 2021. Applications may be submitted to the
Controller of Residential Property and the
a) Shares that are held through whitelisted application form can be obtained from
nominee companies - In instances where SLA’s website at www.sla.gov.sg.
shareholders hold their shares through
nominee companies, these shares will now
be counted towards fulfilling the
shareholding interest criterion if
The story of Asia Pacific Real Assets management firms. Having
Association (APREA) began in 2005 established a leading presence and
with a group of enthusiastic industry think-tank status within the industry,
leaders aiming to set the tone and our community continues to drive
identify real estate trends impactful to breakthroughs and transform the real
the Asia Pacific region. With key assets sector within Asia Pacific.
focuses on advocacy, knowledge APREA's journey began with full
sharing and connecting like-minded coverage of the securitised real
decision-makers, APREA is well- estate arena and primarily focused
established as a leading voice and on the REIT regimes' establishment.
go-to resource in the industry. With the dynamic transformation of
the industry over the past decade,
APREA has evolved to be at the APREA has evolved to cover more
forefront of securitised real assets grounds to serve the needs of the
sector and a one-of-its-kind growing real assets sector.
community of change-makers where
all voices are heard, deliberated, and Real assets include physical or
envisioned. It offers a sophisticated tangible property that can generate
platform that can effectively address passive income streams via leases,
key policy issues affecting real assets mortgages and other covenants, or
and capital markets, as well as by the sale of assets. Two common
decipher global intelligence for forms of real assets include income-
regional and local benefits. The producing real estate and
members of APREA are tightly infrastructure.
connected with one another, as well
as with regulatory bodies and industry For more information visit
experts. www.aprea.asia
With the ability to swiftly adapt to the
ever-changing industry landscape, SIGRID ZIALCITA
APREA has built a diverse community CHIEF EXECUTIVE
OFFICER
of professional leaders and APREA
trendsetters from top publicly-held
and privately-owned real assets
ownership, development, andMD & CEO, Tata Housing Partner, Strategic Advisor,
Development Co. Ltd Baker McKenzie KPMG Australia,
and Tata Realty & GIC and DarkUchi
Infrastructure Ltd.
Managing Director Partner Chief Investment Officer,
Infrastructure South Asia, (Head – Funds, Embassy Office Parks REIT
Caisse de dépôt et Investment & Advisory),
placement du Québec Cyril Amarchand
(CDPQ) Mangaldas
Executive Director, Founder & Chairman Senior Partner,
Property KaiLong Group Corporate Real Estate,
Plenary Group Rajah & Tann Singapore
LLPaprea.asia
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