1

各國 REITs 商品之發展現況

姜堯民 政治大學財務管理系副教授政大商學院信義不動產研究發展中心主任

本講義取材自次級資料，非原始創作，僅當上課講義之用，勿做其他商業使用。

2

3

Lowest Office Vacancy Rates in CBDs

Europe/Middle East/Africa Americas Asia Pacific

Market

Vacancy

RateVacancy

Rate

Market

Vacancy Rate

Vacancy Rate

Market

Vacancy Rate

Vacancy Rate

Jun-04Dec. 2003 Jun-04

Dec. 2003 Jun-04

Dec. 2003

Geneva, Switzerland

3.20% 2.70% Bogota, Colombia

1.60% 4.00% Seoul, South Korea

3.80% 2.80%

Johannesburg, South Africa

3.30% 6.00% Ottawa, Canada

3.80% 3.20% Bangalore, India

5.00% 8.00%

Pretoria, South Africa

4.80% 9.30% Washington, D.C., U.S.

7.20% 7.80% Tokyo-Central Wards, Japan

7.50% 8.00%

Zurich, Switzerland

5.10% 5.80% Calgary, Canada

9.80% 11.70% Wellington, New Zealand

8.30% 9.10%

Paris-Central, France

5.50% 4.60% Santiago, Chile

10.10% 12.30% Taipei, Taiwan

9.70% 13.30%

Stuttgart, Germany

5.50% 5.30%　 　

4

5

6

7

Acrobat ¤å¥ó

A Short Article

8

Methodology for Income TrustsCRITERIA USED IN RATING REITS

The seven main criteria factors used in rating REITs are:(1) Portfolio characteristics;(2) Asset quality;(3) Financial flexibility;(4) Diversification;(5) Size and market position; and(6) Sponsorship and governance.(7) Growth

Dominion Bond Rating Service Limited, Canada

9

This is the most important criteria and involves evaluating the portfolio for:

Type of portfolio – retail, office, and industrial; Rent rollovers; Vacancy rates; Average rents; Portfolio location; Margin performance, overall profitability of the portfolio, and critical mass; Changing nature of the portfolio, particularly in the 2000-2003 period; and Performance of the portfolio, past, present, and expected.

Most REITs made aggressive acquisitions in the past two-and-a-half years (2001 to date) and most portfolios are relatively new to the REIT.

PORTFOLIO CHARACTERISTICS

10

Asset Quality

• Asset quality for REITs looks at the age, location, and characteristics of assets.The lower the capital expenditure of the portfolio, the more is available to distribute to unitholders.Generally, REITs have excellent assets – with long lives and relatively low capital spending needed to maintain the properties, and as such most cash flow can be distributed to unitholders.

11

Financial Flexibility

Financial flexibility measures the availability of capital to the trust from sources such as banks, mortgages, and the capital markets.Financial flexibility includes the capacity to retire maturing debt as it falls due, and overall liquidity.In addition, three key ratios are used debt-to-capital, cash flow-to-debt, and EBITDA/EBIT interest coverage ratios.Debt-to-capital is historically in the 55%-65% range for REITs.Cash flow-to-debt is traditionally 9%-12%. EBITDA/EBIT coverage are traditionally in the 2.00 times-3.00 times range, with EBIT coverage usually 30 basis points behind EBITDA coverage.

12

Diversification

Diversification is important because the better the diversification, the better the stability of cash flow.In the REIT area, there are four main types of diversification: (1) by property; (2) asset type (retail, office, and industrial); (3) tenant; and (4) geographic.REITs have little difficulty attaining property (many different locations) and tenant diversification.However, concentrations arise geographically and by asset type.Too much diversification by asset type (retail, office, and industrial) may by itself not be a good thing, since it can lead to lack of focus and lack of critical mass.

13

Size and Market Position

A REIT may have size, but may lack critical mass in any one of the major product lines (office, retail, and industrial).Size accomplishes four things for REITs:− It gives market clout in negotiating rents for large tenants, making acquisitions, etc.;− It provides better diversification;− It provides economies of scale; and− It opens access to more capital as larger companies with investment-grade ratings can more readily access the capital markets or secure mortgages.

14

SPONSORSHIP AND GOVERNANCE

Sponsorship involves having a large controlling or active shareholder, who can provide management or financial resources to assist a REIT.For a superior ranking in this rating category, a strong sponsor is generally needed.Governance involves examination of the management fee, outside directors, relationship with a sponsoring shareholder, and whether management is internal or external.(Many REITs have a limited internal management team, with outside property management companies handling the day-to-day management.)

15

GrowthGrowth is considered the third most important weighting in the stability rating segment.Growth is defined to be growth of cash distributions to unitholders on a per unit basis.Because REITs pay out most cash flow from operations, there is usually little growth potential.Most REITs issue more equity units to make acquisitions, but the resulting dilution effect neutralizes most of the benefits on a per unit basis.Only if unusually beneficial acquisitions are made at a below market price, or if there are substantial synergies from an acquisition is growth possible.DBRS looks at growth from three viewpoints by comparing:− Per unit income over time;− Per unit cash available to be distributed; and− Per unit gross cash distributions.In most cases, the REITs have shown stable per unit performance.DBRS measures performance as “moderate” where stable per unit results or slight growth is evident. If per unit performance is shrinking the rating is weak.DBRS also looks at the relationship between cash available to be paid, and actual cash distributed.

16

主題

美國：大本營澳洲：美國以外地區的最大市場日本：茁壯中新加坡：靈活有彈性香港： The Link.其他：零零散散綜合討論

17

USA

18

What is a REIT?

A REIT is a company that owns and, in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The shares of a REIT are freely traded, usually on a major stock exchange.A company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate tax bill.

19

REITs came into being with the Real Estate Investment Trust tax provisions of 1960. The impetus for REITs was to provide small investors a means for investing in real estate and to provide them a source of income since REIT securities have high dividend yields.1986 年的稅法改革允許內部管理。1993 年退休基金對 REITs 投資的限制取消。

The Evolution of REITs

20

Key Requirements of US REITsAsset Test:

At least 75% of a REIT’s asset value must come from real estate, cash, and government securities at the close of each quarter of taxable yearNo more than 5% of the value of the assets may consist of the securities of one issuer, and REIT may not own more than 10% of the outstanding shares of one issuer, if those securities are not includable in the 75% test

Income Test:At least 95% of gross income must come from dividends, interests, rents, or gains from sale of certain assetsNo more than 30% of REITs gross income can be derived from sale of real estate held for less than fours years or securities held for less than six months

Distribution Test:At least 90% of the REIT taxable income must be distributed to shareholders

Stock and Ownership Test:REIT shares must be transferable and must be held by a minimum of 100 personsNo more than 50% of REIT shares may be held by five or fewer persons

21

What Types of REITs are There?

Mortgage8%

Hybrid2%

Equity90%

22

23

24

Number Ticker Investment Property Millions of Percent of Percent ofof REITs Company Symbols Sector Subsector dollars Subsector Total

Summary by Property Sector and Subsector39 Industrial/Office 75,710.6 26.554424 Office 48,838.7 17.1295

8 Industrial 17,462.4 6.12477 Mixed 9,409.5 3.3002

34 Retail 69,241.5 24.285519 Shopping Centers 30,686.3 10.7628

9 Regional Malls 32,856.0 11.52386 Free Standing 5,699.2 1.9989

27 Residential 41,797.6 14.659922 Apartments 39,489.7 13.8505

5 Manufactured Homes 2,307.9 0.809517 Diversified 21,709.9 7.614518 Lodging/Resorts 14,715.6 5.1613

5 Self Storage 10,906.7 3.825412 Health Care 13,374.0 4.6907

7 Specialty 13,285.8 4.659834 Mortgage 24,372.9 8.548423 Home Financing 17,381.7 6.096411 Commercial Financing 6,991.1 2.4520

193 Industry Totals 285,114.5 100.0000

Constituent Companies and Relative Weights in the NAREIT Real-Time Index for April 1, 2005(Ranked by property sector/subsector and equity market capitalization in millions of dollars; March 31, 2005)

Equity Market Capitalization1

25

26

27

28

29

30

31

32

33

34

35

FFO (Funds From Operations”)

Start with net income.Then:Add back: Real property depreciation

expense.Add back: Preferred stock dividends

and distributions to OP unit-holders.Deduct: Net gains from property sales

& extraordinary items.

36

FAD (“Funds Available for Distribution”)

Start with FFO.Then:Deduct: Capital improvement

expenditures (CI).Deduct: Amortization of debt

principle (AMORT).Adjust for: Straight-line rents.

37

Who Invests in REITs?

Thousands of investors, both U.S. and non-U.S., own shares of REITs. Other typical buyers of REITs are pension funds, endowment funds and foundations, insurance companies, bank trust departments and mutual funds.Investors typically are attracted to REITs for their high levels of current income and the opportunity for moderate long-term growth. These are the basic characteristics of real estate. In addition, investors looking for ways to diversify their investment portfolios beyond other common stocks as well as bonds are attracted to the unique characteristics of REITs. REIT shares typically may be purchased on the open market, with no minimum purchase required. Many investors also are choosing to own REITs through mutual funds that specialize in public real estate companies.

38

REITs offer investors:

Current, stable dividend income; Dividend growth that has consistently exceeded the rate of consumer price inflation; High dividend yields; Liquidity: share of publicly traded REITs are readily converted into cash because they are traded on the major stock exchanges; Professional management: REIT managers are skilled, experienced real estate professionals; Portfolio diversification: minimizes risk; Performance Monitoring: a REIT's performance is monitored on a regular basis by independent directors of the REIT, independent analysts, independent auditors, and the business and financial media. This scrutiny provides the investor a measure of protection and more than one barometer of the REIT's financial condition.

39

Key Observations

• For the 1973 through 1999 history, the NAREIT index of REIT securities delivered “equity-like” performance. In addition, correlations with other asset classes were generally 0.7 or lower, suggesting some diversification benefit.

• Mean-variance optimizations based on historical performance and BARRA RogersCasey’s forward looking capital market assumptions suggest that, for an investor holding a well-diversified portfolio, a strategic allocation to REITs is not compelling based purely on long-term risk/return expectations. The case for a strategic allocation is stronger for an investor with constraints or outright prohibitions on illiquid assets and/or equities where REITs could be used as a substitute.

• REITs have provided competitive yields versus U.S. equity and fixed income and are expected to continue to do so, based on the requirement that 95% of earnings be paid out as dividends (90% beginning in 2001). This characteristic should be attractive to investors with a preference for income over capital gains.

40

• REITs, like direct investment in real estate, have demonstrated better inflation- hedging capability than U.S. fixed income and equity. However, because the inflation linkage of REITs (and direct real estate investment) is less explicit than that of inflation-linked bonds, an investor seeking an inflation hedge might prefer ILBs to REITs.

• REITs have been, and are expected to continue to be, an effective diversifier of real estate exposure. Returns of REITs and direct investment have not moved in lockstep historically, partly because REITs are daily valued and publicly traded, whereas direct investments are valued less frequently and on an appraisal basis. However, investment in REITs allows greater diversification by property type and by number of investments relative to a direct investment of comparable size.

• REITs are certainly more liquid than direct real estate investment, but according to forecast liquidity from BARRA’s Market Impact Model, are expected to be less liquid than U.S. large cap and small cap equity. Interestingly, there are some very liquid REITs. The increased liquidity of REITs relative to direct investment would only be compelling for investors with prohibitions or constraints on illiquid investments.

41

Umbrella Partnership REITs or UPREITs

The concept of UPREITIn an UPREIT, the REIT does not directly own the underlying propertiesRather the REIT and other real estate owners own units (operating partnership units or OP units) in a partnership that in turn own the underlying physical properties -- Umbrella Partnerships REITsOP units are convertible into shares of REIT, offering voting rights and dividendsThis complicated arrangement allowed property owners (developers) to “sell” their properties to the REIT without triggering taxable event -- non-tax event

42

REIT Shareholders

REIT

AB

Umbrella Partnership Managed by A (formed by REIT)General Manager of Operating Partnership is REIT

Property 1 Property 2 Property 3 Property 4

A’s OP units are sold to REITfor cash or shares

B has the option toconvert OP units to shares of REIT

Exhibit 1: Umbrella Partnership REIT Formation

43

UPREITs and Market Capitalization

The UPREIT is a form of financial engineering or structured financing

The structure is a tax-deferred mechanism through which real estate developers and other owners transferred properties in the form of a tax-exchange -- effect of low adjusted basisSince the transaction did not trigger a taxable event the REIT is able to acquire properties at better earning multiplesConceivably this resulted in shareholder wealth maximizationThe development of UPREITs resulted in massive growth in REIT equity market capitalization in 1990s (see Exhibits 2)These modern REITs feature active management so as to grow cash flows and portfolio size

44

REITs: Spreading Around the World

REITs and other types of public real estate companies have become increasingly prominent participants in the commercial property business around the world. More and more nations are discovering the benefits of REITs—transparency, liquidity, more permanent management and corporate structures, simpler tax structures, easier access to all forms of capital including unsecured debt, greater overall property market efficiency—and are altering their laws to create REIT-like vehicles to realize these benefits. Recent years have seen Japan, France, Singapore, Korea and Hong Kong join the REIT bandwagon.

45

Australia

46

AustraliaIt was only about a decade after REITs were created by Congress in the United States in the 1960s that the Asia Pacific region launched its first REIT (also known as a listed property trust or LPT) - the General Property Trust (GPT) in 1971 in Australia.

Starting with the first LPT in 1971, there are now about 30 LPTs in Australia, with an average value of over US$1 billion, and accounting for some 50% of investment grade stock. The LPT sector has been one of the strongest performing sectors of the Australian Stock Exchange (ASX) since 1994. It continued to outperform the broader All Ordinaries in the year ended the December quarter 2002 with LPTs achieving a total return of 11.0% compared to the All Ordinaries return of -7.2%.

47

In Australia, LPTs are a well established, mainstream investment vehicle with strong appeal to both institutional and private investors. These investors are attracted by the LPTs strong income flows, tax transparency, availability of information, liquidity and quality real estate product. For REITs or LPTs to succeed in Taiwan, they will need to ensure they address all of these issues.

REITs 在澳大利亞被稱為上市地產基金（ Listed Property Funds ），已有相當長的發展歷史，目前有 46 家上市地產基金（ ALPT ），總資產超過 450 億澳元。

48

The first property trust listed on the Australian Stock Exchange (ASX) can be traced back to 1971,Australian LPTs make up 8% of the world’s listed property.During the 1970s and 1980s, the LPT sector was dominated by diversified LPTs. In December 1991, 40% of the LPTs were sector-specific, and this percentage has increased to about 75% (26 of 35 LPTs) in December 2003Since the formalisation of the single responsible entity concept through the legislation of the Managed Investment Act in 1998, more LPTs have adopted stapledsecurities/internally managed structures in recent years.

49

The capitalization of LPTs represents around 8.5 percent of the Australian stock exchange. The sector is dominated by five LPTs, which together make up around 40 percent of the sector's market capitalization. The top 10 LPTs make up more than 65 percent of the sector. LPTs control nearly half of the institutional quality commercial real estate in Australia. There are 80 listed LPTs and other property firms in Australia, with a total market cap of over $50 billion.

50

LPTs tend to fund their growth through a combination of debt and equity, including dividend reinvestment plans. Bank credit facilities continue to be a major portion of debt funding, although public debt issuance—predominantly in the domestic market—should increase in importance as consolidation activity raises concentration risk for banks. LPTs are large and regular bond issuers.

51

Recently, consolidation went into high gear with the merger of Westfield's three trusts—namely Westfield Trust, Westfield America Trust and Westfield Holdings. With this merger, Westfield is the world's largest and most diversified retail property trust, with 123 properties and over 9.6 million square meters (31.5 million square feet) of gross leasable area.

52

53

54

55

56

Japan

57

Japan

In Japan, the revision of the Investment Trust Law in May 2000 (which became effective in November 2000) opened the door for the creation of REITs in that country. About a year later, Japan became the first country in Asia to launch REITs when two property trusts, the Office Building Fund of Japan and the Japan Real Estate Investment Corporation began trading on the Tokyo Stock Exchange (TSE) in September 2001. Almost all participants in J-REITs so far are Japanese conglomerates from the banking, insurance, corporate and real estate sectors, with the exception of UBS Asset Management, which has been the most active in promoting REITs in East Asia.

The issue in Japan is that while J-REITs have been aggressively competing to buy quality properties, there are not many on the market; prime real estate in Tokyo is owned by property and insurance companies, which rarely put these on sale.

58

1 Mar. 8, 2005 CRESCENDO Investment Corporation

2 Dec. 15, 2004New City Residence Investment Corporation

3 Aug. 9, 2004Frontier Real Estate Investment Corporation

4 Mar. 2, 2004Nippon Residential Investment Corporation

5 Feb. 13, 2004 MORI TRUST Sogo Reit, Inc.6 Dec. 22, 2003 United Urban Investment Corporation

7 Dec. 4, 2003 Nomura Real Estate Office Fund, Inc.

8 Sep. 25, 2003Global One Real Estate Investment Corporation

9 Sep. 10, 2003 TOKYU REIT, Inc.

10 Sep. 10, 2002 Premier Investment Company

11 Jun. 14, 2002Japan Prime Realty Investment Corporation

12 Jun. 12, 2002 ORIX JREIT Inc.

13 Mar. 12, 2002Japan Retail Fund Investment Corporation

14 Sep. 10, 2001 Japan Real Estate Investment Corporation

15 Sep. 10, 2001 Nippon Building Fund Inc.

59

Japan- STBRI J-REIT Index

1.Overview The STBRI J-REIT Index is an investment performance benchmark for Japanese Real Estate Investment Trusts (J-REIT). It consists of Composite index that include all listed J-REIT, and sub-indices classified by property types since September 10 2001, the date of the first listing of J-REIT issues on Tokyo Stock Exchange. STBRI J-REIT Index is calculated by accumulating daily weighted average returns, the similar calculation methods used by the NAREIT* Index, which is the best-known REIT benchmark in the United States. As the component of the STBRI J-REIT Index is also similar to that of NAREIT Index, which provides price return, total return, as well as the expected dividend yield, it enables easily to compare J-REIT performance with U. S. REIT.   Since October 2004, the data and figures of STBRI J-REIT Index have been uploaded on the STB Research Institute website.

60

Index graphs

61

62

STBRI J-REIT Index calculation methods1. Price return index (dividends not included)(1) Today’s price return (dividends not included)

Today’s price return (dividends not included) is calculated as a weighted averagebased on the market capitalization on the previous day, using the following formula.

63

(2) Price return index (dividends not included)The price return index (dividends not included) is calculated by totaling the dailyprice return, with the value of the index on the base date (September 10, 2001) set at 1000.

64

2. Total return index (dividends included)(1) Today’s total return (dividends included)

Today’s total return (dividends included) is calculated as a weighted average based onthe market capitalization on the previous day, using the following formula.

65

(2) Total return index (dividends included)The total return index (dividends included) is calculated by totaling the daily totalreturn, with the value of the index on the base date (September 10, 2001) set at 1000.

66

3. Comparison of the performance of public real-estate investment markets in Japan, the United States, and Australia (March 1, 2005)

(1) Comparison of REIT market size between Japan, the U.S., and Australia

(data as of January 31, 2005)

Notes:“REIT market size” refers to the market capitalization of all listed REIT issues.“Stock-market capitalization for each country” refers to the following:In Japan, market capitalization of the Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, and JASDAQ exchanges (data source: Bloomberg) In the U.S., market capitalization of the NYSE, AMEX, NASDAQ, BSE, CHX, NSX, PCX, PHLX, and SDSE exchanges (data source: Bloomberg). In Australia, market capitalization of the ASX exchange (data source: ASX)

Japan (J-REIT)

US (US-REIT)

Australia (LPT)

REIT market size ($USB)

17.2 307.9 67.9

Share of stock-market capitalization

0.5% 2.1% 9.4%

67

(2) Comparison of REIT performance between Japan, the U.S., and Australia

68

(3) Comparison of REIT total returns between Japan, the U.S., and Australia

Notes:Japan (J-REIT) figures were calculated using the STBRI Composite J-REIT Total Return Index U.S. (US-REIT) figures were calculated using the NAREIT Equity REITs Total Index.Australia (LPT) figures were calculated using the S&P/ASX 300 Property Trust Accumulation Index.

REIT market Japan (J-REIT) US (US-REIT)

Australia (LPT)

Total return over most recent year(January 1, 2004 - January 31, 2005)

28.4% 15.5% 32.7 %

Total return since listing of J-REITs (converted to annual rates)(September 10, 2001- January 31, 2005)

17.7% 18.4% 18.2%

69

Total returns over most recent year

70

Total returns since listing of J-REITs (converted to annual rates)

* Stock-market performance was calculated using TOPIX (for Japan),the S&P 500 (for the U.S.), and the S&P/ASX 200 (for Australia).

71

(4) Correlation between the REITs of Japan, the U.S., and Australia

Correlation between monthly total returns (end of September 2001- end of January 2005)

Notes:J-REIT figures were calculated using the STBRI Composite J-REIT Total Return IndexUS-REIT figures were calculated using the NAREIT Equity REITs Total Index.LPT figures were calculated using the S&P/ASX 300 Property Trust Accumulation Index.

J-REIT US-REIT LPT

J-REIT 1.00

US-REIT 0.26 1.00

LPT 0.26 0.31 1.00

72

South korea

73

Following Japan's footsteps, South Korea introduced the Real Estate Investment Trust Act in July 2001 to allow for the establishment of REITs in order to aid the corporate restructuring process. Earlier in 2002, enabling legislature was also passed to form asset management companies (AMCs), which in turn can launch REITs.Since the REITs Act, three Corporate Restructuring REITs (CR-REITs) have been listed on the Korea Stock Exchange - the Kyobo-Meritz CR-REIT, the KOCREF 1 and KOCREF 2 CR-REITs, with more seeking approval.

South Korea

74

Currently, there were 7 REITs listed on the Korea Stock Exchange. Market capitalization is 617487 million KRW.

75

Two forms of REITs: K REITs and CR REITs (corporate restructuring REITs)Both types of REITs must have minimum capital of 50 billion Won

At least 70% of K REITs assets must be in real estate At least 70% of CR REITs must be real estate being disposed b

y companies undergoing restructuring due to insolvency, reorganization or where proceeds are used to retire debt

CR REITs are fully exempt from acquisition and registration tax

CR REITs can deduct dividends as expenses if dividend payout is at least 90%No tax benefits for dividend payments for either K REITs or CR REIT investors.

76

Singapore

77

S REITs can either have a corporate or a trust structure All three S REITs established to date have trust structure

At least 70% of S REITs assets must be real estate or real estate related assets20% limit on investment in uncompleted commercial propertiesProperty development activities prohibitedNo restriction on location of investments

Borrowing restricted to 35% of total asset valueMust distribute 100% of net income

S REITs with trust structure can pass to investors taxes paid as tax creditNo tax exemption for S REITs

78

Live Quotes from SGX

Last

Change

% Vol B Vol Buy Sell S Vol High Low Sector

Ascendasreit

1.88

0.01 0.5 243 143 1.88 1.89 696 1.9 1.87 PROP

CapitaComm

1.41

-0.02 -1.4 28 161 1.41 1.42 86 1.43 1.41 PROP

CapitaMall 2.04

0.01 0.5 557 339 2.03 2.04 334 2.04 2.03 PROP

Fortune Reit HK$

6.6 -0.05 -0.8 30 65 6.55 6.6 30 6.6 6.6 PROP

SuntecReit 1.27

-0.02 -1.6 2,422 673 1.27 1.28 838 1.29 1.27 PROP

79

SingaporeSingapore's first REIT, the CapitaMall Trust (CMT), a mixture of suburban retail malls and a specialised IT retail centre began trading on the stock exchange in July 2002. The second, the Ascendas REIT (A-REIT) consisting of a pool of industrial and business park buildings, made its debut on November 19, 2002. Both the CMT and A-REIT achieved a better-than-expected subscription rate of about five times for their initial public offer (IPO). Another REIT in Singapore is The Fortune REIT, to be launched by Hong Kong's Cheung Kong (Holdings) Ltd. This is the first Singapore-listed property trust investing in Hong Kong properties. Although REITs constitute a very new investment product in the Singapore market, the success of the first two "S-REITs" suggest that local retail investors have quickly learned to appreciate its benefits.

80

The two REITs have obtained tax transparency status at the corporate level from the Inland Revenue Authority of Singapore (IRAS), which was deemed to be one of the key success factors in the launches of the two REITs. The forecasted yields for CMT and A-REIT at their launches were 7% and 8% respectively. The high yields have been an important factor underpinning the 5% over-subscription when both REITs tested the equity market on their debuts. CMT and Fortune are pure retail REITs, whereas A-REIT is a sector-specific industrial REIT. The first two REITs have been actively expanding their portfolios through acquisition of new properties. The details of listing and the asset holdings of the three REITs are summarized in Exhibit 1.

81

2 March 2005, Singapore - Ascendas-MGM Funds Management Limited (in its capacity as the manager of Ascendas Real Estate Investment Trust (“A-REIT”), the “Manager”), wishes to announce that A-REIT will be the first listed real estate investment trust (“REIT”) to benefit from the tax concessions announced in the Budget Statement 2005 as part of a package of tax changes to position Singapore as a preferred location in Asia for listing REITs.

82

Certain of the tax concessions in the Budget Statement 2005 are as follows:

(1) Reduction of Withholding Tax Rate to 10% on Distributions made to Foreign Non-Individual Investors

It was announced during the Budget Statement 2005 that the tax rate on distributions made by any REIT listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”) to a foreign non-individual investor during the period from 18 February 2005 to 17 February 2010 will be reduced from 20% to 10%.

83

(2) Waiver of Stamp Duty (Effective from 18 February 2005 to 17 February 2010)

The Monetary Authority of Singapore has confirmed that the stamp duty chargeable on any instrument relating to the sale of any immovable property situated in Singapore or any interest thereof by a company or an individual to a REIT shall be waived if the REIT is already listed on SGX-ST. This waiver is effective for instruments executed between 18 February 2005 to 17 February 2010.

84

Fortune-REIT is a Singapore-based unit trust formed primarily to own and invest in a portfolio of retail shopping malls located in Hong Kong.Such investments are either held directly by Fortune-REIT or held through other companies whose primary purpose is to own or hold real property.

85

Fortune REIT is particularly interesting since it was offered by a leading Hong Kong property company, Cheung Kong (Holdings) Ltd. Fortune REIT, which holds five shopping malls located throughout Hong Kong, was launched in August 2003. Fortune REIT was 3.7 times oversubscribed and raised HK$906 million.

86

The aggregate acquisition value of the properties sold by Cheung Kong was approximately HK$3.1 billion. Fortune REIT raised in excess of HK$2 billion through its IPO in Singapore and an international placement to institutional and other investors.Cheung Kong was the sponsor of Fortune REIT and subscribed for approximately 27.4 per cent of the units of Fortune REIT (subject to reduction to approximately 21.4 per cent if an over-allotment option granted in connection with Fortune REIT's IPO is exercised in full).

87

Hong Kong

88

Hong Kong

In Hong Kong, The Securities and Futures Commission is reviewing the final Code on REITs, which is expected to be released in Q3 2003.

89

A Hong Kong REIT must be structured as a trust with an independent trustee and a management company. Corporate entities are not permitted, as they are in certain other jurisdictions. The REIT may hold assets directly or indirectly through the use of wholly-owned special purpose vehicles ("SPVs"). A Hong Kong REIT must invest only in real estate located in Hong Kong. The REIT must invest in real estate that is generally income generating. The Code therefore prohibits the REIT from investing in vacant land or participating in "property development activities.“ The REIT may, however, acquire uncompleted units that are either (a) unoccupied and non-income producing properties or (b) in the course of substantial development, redevelopment or refurbishment, so long as the value of such properties do not exceed 10% of the REITs total net asset value (at the time of acquisition). The REIT must hold each property for at least two years. The minimum dividend payment, on an annual basis, must be at least 90% of the REIT’s net income after tax. A Hong Kong REIT may not borrow (either directly or through its SPVs), more than 35% of the total net asset value of the REIT.

90

Engage a Qualified Trustee, Management Company and Property Valuer.Trustee.

A Hong Kong REIT must appoint an experienced trustee to ensure, among other things, protection of the rights and interests of the REIT investors. The trustee must be either (a) a licensed bank, (b) a trust company which is a subsidiary of a licensed bank or (c) a banking institution or trust company incorporated outside of Hong Kong which is acceptable to the SFC. The trustee must be independently audited and have minimum issued and paid-up capital and non-distributable capital reserves of at least HK$10 million.Management Company. A Hong Kong REIT must appoint a management company licensed by the SFC to be responsible for the conduct the overall business of the REIT.Property Valuer. A Hong Kong REIT must appoint an independent property valuer, which valuer must be in the business of valuing Hong Kong property. The valuer must have a mimimum of HK$1 million in paid-up capital and its assets must exceed its liabilities by at least HK$1 million. The valuer must retire after conducting valuations for the REIT for three years.

All Hong Kong REITs must be listed on the Stock Exchange of Hong Kong.

91

香港 可望 6 月實施新的房地產基金制度，開放房地產投資信託基金（ REIT ）投資國外的房地產市場 ，包括 大陸 的房地產市場。

92

93

世界最大房地產基金上市計劃一波三折 香港五十一萬小投資者發財夢碎。香港房委會 19 日晚開會后決定暫時擱置領匯在星期一上市的計劃。這個世界最大房地產基金上市計劃的擱淺，竟是因為一名為盧少蘭（香港媒體稱其“阿蘭”）的老太太。 2003 年，香港房委會通過以房地產信托基金形式，將旗下商場、停車位等設施上市。 2004 年 8 月，基金正式定名為領匯房地產投資信托基金 ( 領匯 ) 。領匯基金上市預計在全球範圍集資 230 億港元（約 30 億美元），是全球同類計劃中數額最大的。 香港兩位公屋居民盧少蘭、馬基召向高等法院申請司法復核，認定香港房屋委員會違反《房屋條例》，要求法院聲明房屋委員會違例，并基于公眾利益頒布臨時禁令，禁止房屋委員會將資產注入領匯基金

94

經濟通記者潘磊華報道》證監會２００２年７月《房地產投資信託基金守則》出台逾一年，遲遲未有地產商肯將資產分拆上巿，最終房委會「打頭陣」分拆首隻香港上巿的ＲＥＩＴ，卻因公屋居民盧少蘭等人，連番阻撓而令全球上最大規模的私有化計劃難產。醞釀年半的領匯上巿計劃，房委會去年１１月底公布招股詳情之際，先被立法會議員鄭經翰、陳偉業及「長毛」梁國雄「踩場」，當眾質疑賤賣資產及擔心令租戶捱貴租，其後需由領匯行政總裁蘇慶和及房屋及規劃地政局常任秘書長梁展文連日解畫才能平息租戶疑慮，而領匯招股散戶部份最終獲超購１２９倍，凍結巿場資金達２８００億元。及後，兩名公屋居民盧少蘭及馬基召，就領匯上巿提出司法覆核及申請禁制令，與房委會對簿公堂，訴訟更在五天內由高等法院打上終審法院，掛牌日期亦一度延後，但最終因房委縮短上訴期限申請敗訴，未能為領匯「零風險」掛牌掃除疑慮，被迫在上巿前一刻「漏夜」叫停。領匯上巿泡湯，事件被認為政治化，除令房委會錯失套現３２０億的機會，商場商戶失去改善管理，而５１萬散戶投資者獲利的好夢亦落空，造成「三輸」局面，如今被指「幕後黑手」的鄭大班等人仍未決定是否上訴。房屋及規劃地政局局長孫明揚表示，需待取得「終極審訊」結果後，才盡快部署再讓領匯上巿。今次事件，無疑對本港作為國際金融中心聲譽、外國投資者信心多少構成影響，唯一不變香港的司法制度的健全獲得肯定，但政府下一項分拆機管局上巿的計劃，會否汲取領匯教訓，最終命途如何仍是問號。

95

經濟通專訊》房屋署副署長麥靖宇表示，預期領匯今年中上市機會不大，可能到年底仍未能上市。他解釋，息口上升或會降領匯吸引力。不過，經濟好轉可帶動租值上升，而到目前為止，房屋署難以估計延遲上市所帶來的影響。（ｋａ）

96

The Future of REITs in Asia Pacific

Even for the three Asian countries that have launched REITs - Japan, South Korea and Singapore, there are still some obstacles to be overcome. For instance,

in Japan the lack of other high-quality properties to be injected into REITs in

Japan, in South Korea the high barrier of entry created by the minimum required capital o

f Won 50 billion in South Korea, in Singapore the conservative 35% cap on gearing in Singapore.

However, as both developers and investors get familiar with the REIT instrument and there is a paradigm shift in their mindsets towards a yield-driven market rather than relying heavily on capital growth returns, it is certain that the REITs market in Asia Pacific will become a highly active investment market.