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1、07Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketWhile the global REIT sector has grown by over 150 new entities since 2019,reaching more than 1,000 worldwide,Hong Kongs market has maintained 11 REITs

2、throughout the 2020s,suggesting room for further expansion.Broadly speaking,the global REIT landscape demonstrates varying growth trajectories across different markets.Although Hong Kongs market has seen limited expansion,the Chinese mainlands emerging REIT sector has witnessed explosive growth.Star

3、ting as a pilot programme in 2020 and evolving into a normalised issuance mechanism in 2024,the mainland REIT market has developed rapidly,reaching 45 REITs in just three years(as of Q3 2024).This growth pattern,however,contrasts with the development seen in five of the worlds most established REIT

4、markets Singapore,Japan,Australia,the US and the UK.These established markets have experienced modest contractions in their REIT numbers over the past five years,highlighting the uniqueness of expansion in the Chinese mainland.Meanwhile,among key Asian emerging economies that introduced REIT framewo

5、rks between the 2000s and 2010s,India,Malaysia and the Philippines have recorded measured growth,while Thailand has maintained relatively stable numbers.Notably,although the global REIT count has risen primarily due to emerging markets total market capitalisation has not grown proportionally,suggest

6、ing a complex interplay of factors shaping the REIT ecosystem worldwide.Market Size:Subdued amid Global GrowthFigure 2:Global REIT Market OverviewSource:European Public Real Estate Association(EPRA)Number of REITsUSD billionTotal market cap(USD billion)Number of REITs8629009709631,1091,018$2,044bn$1

7、,927bn$2,500bn$1,862bn$1,984bn$2,015bn05001,0001,5002,0002,5003,00002004006008001,0001,200Q4 2019Q4 2020Q4 2021Q4 2022Q4 2023Q3 202408Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketQ4 2020Q4 2021Q4 202

8、2Q4 2023Q3 2024US17*Australia18Japan19UK20Singapore21Hong Kong22Chinese Mainland23India24Malaysia25Thailand26ThePhilippines2722350665742120317591217506353441111318595206466254421124319628195465849411129619608194465845411145519567050100150200250Number of listed REITsUSD billionNumber of listed REITsM

9、arket cap(USD billion)194465845411145519567$1,513.38bn$125.31bn$104.30bn$80.30bn$74.35bn$18.75bn$17.79bn$12.40bn$11.44bn$9.85bn$5.06bn02004006008001,0001,2001,4001,600050100150200250US6*Australia7Japan8UK9Singapore10Hong Kong11Chinese Mainland12India13Malaysia14Thailand15ThePhilippines16*US data are

10、 as of 30 August 2024,based on the latest available statistic from the National Association of Real Estate Investment Trusts(NAREIT).Source:NAREIT;Australian Securities Exchange;L;Japan-REIT.com;Japan Exchange Group;EPRA;Singapore Exchange;Hong Kong Exchanges and Clearing Limited(HKEX);Wind Financia

11、l Terminal;Securities Times,China.*US data are as of 30 August 2024,based on the latest available NAREIT statistic.Source:NAREIT;Australian Securities Exchange;Japan-REIT.com;EPRA;Singapore Exchange;REIT Association of Singapore;HKEX;Wind Financial Terminal;Shanghai Stock Exchange;Shenzhen Stock Exc

12、hange;Haitong Securities.Figure 3:Selected REIT Markets Overview(as of Q3 2024)Figure 4:Numbers of Listed REITs in Selected Markets in the Past Five Years09Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT Mark

13、et-46.1%-6.9%-5.8%*-21.6%55.8%25.0%-9.0%-60%-40%-20%0%20%40%60%80%Q4 2014(base point)Q4 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2020Q4 2021Q4 2022Q4 2023Q3 202410-year performance(Q4 2014 through Q3 2024)Hong Kong(Hang Seng REIT Index)Chinese Mainland(CSI REITSs Total Return Index28)Singapore(iEdge S-REI

14、T Index)Japan(Tokyo Stock Exchange REIT Index)Australia(S&P/ASX 200 A-REIT Index)US(S&P United States REIT Index)UK(FTSE 350 Real Estate Investment Trusts Index)*October 2021 through September 2024.The CSI REITSs Total Return Index was launched in October 2021 with a base point of 1000.In the past d

15、ecade,REIT performance across key mature markets has shown divergent trends.Hong Kong REITs demonstrated robust growth momentum in the first half of the period,outperforming several major markets,before facing notable headwinds amid broader macroeconomic challenges post-2020.The US and Australia eme

16、rged as the strongest overall performers,benefiting from resilient property markets and sustained investor demand.Singapore and Japan exhibited relative stability throughout the period despite market fluctuations,although both markets softened in the latter phase.The UK market demonstrated mixed per

17、formance,with initial gains giving way to more challenging conditions in recent years.Market Performance:Recent Headwinds in a Mixed EnvironmentFigure 5:Performance of Selected REIT Markets since Q4 201410Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growt

18、h through Reform:A Vision for Hong Kong REIT MarketHong Kongs REIT market primarily focuses on retail and office properties,while other major markets feature a more diverse and expansive range of offerings.The US market,in particular,stands out with its extensive array of asset types,encompassing tr

19、aditional sectors alongside innovative niches like data centres,gaming facilities and telecommunications infrastructure.This diversification not only broadens investment opportunities but also provides a buffer against sector-specific downturns and a more resilient investment landscape.In terms of g

20、eographical distribution,Hong Kong REITs show a strong local focus,with 73%of investments concentrated in Hong Kong and the Chinese mainland,while 27%include overseas assets.In contrast,Singapore REITs are more geographically diverse:over 90%of them have ventured beyond local borders,investing eithe

21、r partially or entirely in overseas markets.This broader geographical reach by Singapore REITs reflects their international investment strategy,while potentially offering additional risk mitigation through cross-border diversification.Asset Diversity:Sector and Geographic Concentration11Unlocking Fu

22、ture Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT Market In Hong Kong,diversified assets primarily comprise retail and office properties.*US data are as of 30 August 2024,based on the latest available NAREIT statistic.Note

23、:Percentage figures may not sum to 100%due to rounding.Source:Company reports of listed H-REITs;HKEX;Singapore Exchange;Japan-REIT.com;Australian Securities Exchange;NAREIT.*For Hong Kong,figures are as of end dates of the latest company reports of respective H-REITs.For Singapore,figures are as of

24、September 2024.Excluding one S-REIT whose trading is now suspended.Source:Company reports of listed H-REITs;Singapore Exchange.Figure 6:REIT Asset Portfolio(as of Q3 2024)Figure 7:Geographical Exposure of REIT Assets*13.79%48.28%8.62%3.45%15.52%8.62%1.72%20%13%25%13%20%5%5%18%27%36%9%9%Hong Kong29(%

25、by trust count)Australia32(%by value traded)US33(%by trust count)*Singapore30(%by trust count)Japan31(%by trust count)2.20%26.55%11.96%42.36%6.77%10.17%9.79%2.58%1.55%2.06%1.03%1.03%14.95%10.82%8.76%7.22%6.19%9.79%9.14%4.12%10.31%10.31%RetailOfficeDiversifiedHospitalityIndustrialHealthcareResidentia

26、lLogisticsCommercialSpecialisedLodging/resortsTelecommunicationsTimberlandMiscellaneousSelf-storageData centresHome financingCommercial financingGaming73%27%Hong Kong and/or Chinese mainland onlyHong Kong and/or Chinese mainland,plus overseasHong Kong34(%by trust count)Singapore35(%by trust count)Si

27、ngapore onlySingapore and overseasOverseas only7.5%50%42.5%14Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketIn interviews,H-REIT CEOs shared their perspectives on the following regulatory features of H

28、ong Kongs market:Legal structureH-REITs operate under a unit trust structure,while some other major REIT markets such as the US and Japan accommodate multiple legal forms.Kevin Leung,Executive Director and CEO of Spring Asset Management Limited,pointed to capital raising constraints as a key challen

29、ge in the trust structure:while REITs can theoretically fund acquisitions through debt or equity,unitholder approval requirements for equity issuance,combined with leverage limits,particularly restrict smaller REITs growth.In contrast,alternative legal structures,he said,could provide significantly

30、more flexible capital management options.Deliang Lin,Chairman,Executive Director and CEO of Yuexiu REIT Asset Management Limited,highlighted the operational challenges under the trust framework,noting that every major decision requires additional processes and time and that securing such authorisati

31、on,particularly for acquisitions,often involves a longer-than-usual execution period that reduces the attractiveness of capital market activities.Echoing these concerns,George Hongchoy,Executive Director and Group CEO of Link Asset Management Limited(Link),believes that a more balanced approach betw

32、een trust and corporate structures could help enhance market development.The trust framework also has specific accounting implications:H-REITs established before 1 December 2013 under legacy perpetuity rules have a limited lifespan of 80 years and are therefore classified as liabilities rather than

33、equity on a sponsors consolidated statement of financial position.Mr Lin noted that this treatment provides no financial advantage and reduces incentives for older REITs to expand their operations,because the liability classification weakens the sponsors balance sheet metrics.Holding period restrict

34、ionThe REIT Code stipulates that H-REITs must hold their properties for a period of at least two years a rule that is not commonly seen in other mature markets.This requirement influences the timing of portfolio adjustments when H-REITs seek to divest properties that may no longer match their invest

35、ment objectives or risk parameters.Mr Hongchoy of Link noted that the requirement has implications for managing different investment phases and return profiles:More often than not,a REIT divesting from a property is not about speculation,but a matter of acknowledging the propertys stage of developme

36、nt.This restriction,he explained,limits REITs ability to react swiftly to market volatility or respond to unsolicited yet attractive offers.He said the additional layers of REIT manager and trustee oversight further constrain the acquisition and disposal process,effectively limiting options for auct

37、ions and tenders,leading to increased uncertainty and transaction risks.Mr Hongchoy further pointed out that value-add opportunities through renovation and immediate sale a legitimate strategy for portfolio optimisation are effectively blocked because of this rule.Even when short-term divestment cou

38、ld be profitable,were forced to hold,despite potentially different long-term returns,he said,adding that this restriction is unique to Hong Kong among major REIT markets.Borrowing thresholdH-REITs face a borrowing limit of 50%of total gross asset value compared to Japan,Australia,the US and the UK,w

39、here borrowing is essentially unlimited but subject to various financial restrictions or tax implications.This threshold shapes how H-REITs structure their financing for growth opportunities and market participation,particularly in terms of acquisition and expansion funding.Comparative Analysis acro

40、ss Markets15Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketMr Lin of Yuexiu REIT emphasised that the 50%gearing cap becomes particularly disadvantageous in designing the financial structure of a REIT.H

41、e suggested that the gearing cap should take into account factors such as the asset quality of a REIT,its rating by international rating agencies,and other qualitative elements that influence the overall investment outlook.Such an approach,he argued,could better align regulatory limits with the uniq

42、ue characteristics and strengths of individual REITs.Limits on investment in development projectsH-REITs can only engage in property development activities up to 10%of their gross asset value(which can be increased to 25%subject to unitholders approval).They are also generally prohibited from invest

43、ing in vacant land.This cap can be viewed as an impediment to H-REITs development,as it limits their ability to leverage debt for acquisitions,expansions or refinancing activities that,as Mr Hongchoy noted,could improve risk-adjusted returns for investors.This limitation could in turn reduce H-REITs

44、 competitiveness in fast-moving markets.Prohibition of financial assistance provided by H-REITsThis rule prevents H-REITs from acquiring distressed properties through secured loan arrangements,a common market practice,and hinders them from engaging in beneficial transactions such as providing loans

45、to joint venture partners for property development or enhancement.Rule on perpetuityUnder the Perpetuities and Accumulations Ordinance,H-REITs created before 1 December 2013 are subject to the rule against perpetuity that limits their duration to 80 years.This restriction complicates long-term strat

46、egic planning,particularly for extensive property investments and development projects,and limits the financing options for H-REITs when compared with corporates that can issue perpetual bonds.16Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through

47、Reform:A Vision for Hong Kong REIT MarketIn an extensive interview with Deloitte and HKREITA,Christina Choi,Executive Director,Investment Products Division,Securities and Futures Commission(SFC),highlighted that the SFC has always kept abreast of the latest regulatory developments overseas and maint

48、ained a regime that is generally on par with other comparable overseas jurisdictions in view of its product nature.Regarding specific regulations,Ms Choi mentioned that apart from the trust structure,H-REITs may also adopt a stapled structure as long as similar governance and investor protection mea

49、sures are in place.She added that certain listed property companies that are majority holders of H-REITs have consolidated their investments in REITs in their financial statements despite the trust structure.She also noted that acquisitions,financial assistance,secondary offerings and other transact

50、ions undertaken by H-REITs are subject to the same requirements as applicable to other Hong Kong-listed companies under the Hong Kong Stock Exchanges Listing Rules.17Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong

51、 REIT MarketTable 1:Regulatory Frameworks of Selected RegionsHong KongChinese MainlandSingaporeJapanAustraliaUSUKStructureTrustFund investing in asset-backed securitiesTrustTrust or corporationTrustAny legal US entity taxed as a domestic corporation(US entity classification rules allow flexibility f

52、or non-corporate entities,e.g.partnership,business trust,limited liability company,to elect to be treated as a corporation).Closed-ended company(there is a separate regime for open-ended funds).Primary regulatory bodySecurities and Futures CommissionChina Securities Regulatory Commission;National De

53、velopment and Reform CommissionMonetary Authority of Singapore(MAS)Financial Services Agency;Securities and Exchange Surveillance Commission;respective Local Finance BureauAustralian Securities and Investments CommissionSecurities and Exchange Commission(for public REITs);Internal Revenue Service;Tr

54、easury DepartmentHM Revenue and CustomsMain regulatory FrameworkREIT Code,with reference to listing requirementsGuidelines for Publicly Offered Infrastructure Securities Investment FundsSecurities and Futures Act;Code on Collective Investment SchemesAct on Investment Trusts and Investment Corporatio

55、ns;Securities Listing RegulationsManaged Investment Scheme(MIS)rules under Corporations ActSecurities Exchange Act;Internal Revenue Code;Treasure RegulationsREIT provisions under the Corporation Tax ActLimits on investment in development projectsMust not exceed 10%of its gross asset value.This limit

56、 can be raised up to 25%subject to unitholders approval.At least 80%of assets should be invested in infrastructure assets.The remaining assets should be interest rate securities,AAA-rating credit securities,or money market instruments.Must not exceed 10%of its deposited property.This limit can be ra

57、ised to 25%under certain conditions,including that the additional allowance is used solely for redeveloping an existing property that has been held by the trust for at least three years and will continue to be held for at least three years after redevelopment completion.Activities other than asset m

58、anagement are not allowed.A-REITs that carry out trading business,such as developing land for sale,will not be eligible for flow through treatment.At least 75%of gross assets must consist of real estate,cash items,and US government securities.It may develop properties for its own investment portfoli

59、o.At least 75%of the UK REIT groups gross assets and accounting profits must relate to the property rental investment business.It may develop properties for its own investment portfolio,subject to a 3-year development rule that requires properties which have been significantly developed to be held f

60、or at least 3 years after development to qualify for REIT tax exemptions.18Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketHong KongChinese MainlandSingaporeJapanAustraliaUSUKReal estate holding period

61、restrictionsAn H-REIT must hold its real estate for a period of at least two years,unless approval is obtained from its unitholders.NoneNoneNoneNone,but real estate investments must be primarily to derive rent.NoneA UK REIT must have a property rental business where the properties should be held wit

62、h an investment intention(typically evidenced by a hold period of at least 3 years).Borrowing limitsBorrowings must not exceed 50%of the total gross asset value of the scheme.Total assets must not exceed 140%of net assets.Borrowings for project acquisition shall not exceed 20%of net assets.Borrowing

63、s must not exceed 45%of the total gross asset value of deposited property.The limit can be raised to 50%if the REIT has a minimum interest coverage ratio(ICR)of 2.5 times.The MAS is proposing to simplify these requirements with a single aggregate leverage limit of 50%and a lower minimum ICR of 1.5 t

64、imes for all REITs.Unlimited,but any borrowings by a REIT must be from a qualified financial institution.Unlimited,but the default fixed ratio test methodology broadly restricts net debt deductions to 30%of tax EBITDA,with limited grouping.An elective third-party debt test is also available.Unlimite

65、d,but tax code caps interest deductions at 30%of the taxpayers tax-adjusted EBIT with ability for REITs to have no limit by electing to be a Real Property Trade or Business under which certain depreciation deductions are taken over an extended life.Unlimited,but there is a cash penalty charge if Pro

66、fit:Financing Cost Ratio is lower than 1.25(i.e.rental profits need to be at least 1.25 times of finance costs),and tax deductions for interest expenses are limited by general corporate interest restriction rules.Mandatory distributionsYes,at least 90%of annual net income after tax.Yes,at least 90%o

67、f annual distributable profits.No,but an S-REIT must distribute at least 90%of its annual taxable specified income to enjoy tax concessions.No,but a J-REIT must distribute over 90%of its annual distributable profits to qualify for the dividend payment deduction.No,but A-REITs usually distribute 100%

68、of annual taxable income.Yes,at least 90%of annual ordinary taxable income,with some flexibility for subsequent year distributions to be counted toward prior year.Yes,at least 90%of annual exempt rental profits within 12 months.19Unlocking Future Growth through Reform:A Vision for Hong Kong REIT Mar

69、ketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketTable 2:Overview of Regulatory Regimes of Selected RegionsRegionDescriptionChinese MainlandLaunched as a pilot programme in 2020 with the first batch of REITs listed in 2021,the Chinese mainland REIT market is governed by a

70、regulatory framework primarily overseen by the China Securities Regulatory Commission(CSRC)and the National Development and Reform Commission(NDRC).Unlike traditional equity REITs,the Chinese mainland model is structured as a public fund investing in asset-backed securities(ABS)of infrastructure pro

71、jects.Focusing on serving the nations development strategy,the mainland REIT market initially concentrated on infrastructure assets such as industrial parks,toll roads,logistics warehousing and environmental protection projects.After three years of development,it has expanded to include clean energy

72、,affordable rental housing and consumer infrastructure.Notably,the NDRCs approach to infrastructure REITs has always been pilot-based and gradual.In July 2024,the NDRC officially launched an updated policy that transformed the REIT pilot programme into a normalised issuance framework,removing previo

73、us restrictions on project return ratios and state-owned asset transfers.43 SingaporeSingapores REIT market,launched in 2002,has evolved into one of Asias most established and diverse REIT ecosystems.The regulatory framework,primarily governed by the Securities and Futures Act 2001 and the Code on C

74、ollective Investment Schemes,is characterised by its robustness and flexibility.The regime is designed to accommodate international assets,enabling S-REITs to grow through cross-border acquisitions and solidifying Singapores position as a key hub for REITs with regional portfolios.It also allows for

75、 investment in a wide range of asset types,fostering innovation and diversification.In recent years,the Monetary Authority of Singapore has implemented several regulatory changes to enhance S-REITs competitiveness,most notably raising the maximum leverage limit from 45%to 50%subject to certain finan

76、cial requirements.JapanJapans REIT market was established in 2000 with the amendment of the Act on Investment Trusts and Investment Corporations.J-REITs are structured as investment corporations with external management,a unique feature that requires the appointment of registered asset management co

77、mpanies.The regime mandates specific licences and registrations,including the Building Lots and Building Transactions Agent Licence and registration with the Financial Services Agency.A key regulatory aspect is the tax-efficient structure,which allows J-REITs to deduct distributed dividends from tax

78、able income,subject to certain conditions.Recent regulatory developments have included measures to enhance competitiveness,such as allowing funds-of-funds and expanding into diverse asset types,solidifying J-REITs position in the global REIT landscape.AustraliaAustralias REIT market has grown signif

79、icantly since its inception in 1971.The regulatory regime is characterised by its flexibility,allowing for both listed and unlisted structures,as well as externally and internally managed trusts.A distinctive feature is the stapled securities model,which combines a passive property trust with an act

80、ive management company,enabling A-REITs to engage in both property ownership and development activities while maintaining tax efficiency.The regulatory framework is notably liberal,with no strict requirements on real estate investment ratios or dividend distributions,although market practice favours

81、 high payout ratios.A-REITs also face no limitations on overseas investments,fostering geographical diversification.This flexible approach has contributed to the markets maturity and global prominence.Recent innovations,including the introduction of the Corporate Collective Investment Vehicle(CCIV)r

82、egime in 2022,further demonstrate the ongoing evolution of Australias regulatory landscape.United StatesThe US REIT market,established in 1960 through revisions to the federal tax code,is the oldest globally and has served as a model for many international REIT regimes.The regulatory framework,prima

83、rily rooted in tax law,created a vehicle for small investors to access large-scale,income-producing real estate investments.A significant milestone was the Tax Reform Act of 1986,which reshaped the landscape by reducing real estate tax shelters and allowing REITs to own,operate and manage their prop

84、erties directly.This legislative change catalysed the sectors expansion,enabling REITs to grow through property acquisition,development and management,rather than merely acting as passive investment vehicles.The regulatory regimes flexibility has allowed for the evolution of various REIT types,inclu

85、ding equity REITs investing directly in real estate and mortgage REITs focusing on real estate financing.Over the decades,the US REIT market has transformed from a niche sector to a mainstream investment vehicle,demonstrating the effectiveness and adaptability of its regulatory structure in respondi

86、ng to market needs and economic changes.United KingdomThe UK REIT regime,introduced by the Finance Act 2006 and launched on 1 January 2007,was initially designed to provide tax-efficient structures for large-scale listed property investments.The regulatory framework has undergone several key amendme

87、nts to enhance its attractiveness and accessibility.A transformative change came in 2012 with the institutional investor relaxation,which allowed institutional investors such as pension schemes to hold private/captive UK REITs marking a major shift from previous restrictions on closely held companie

88、s.Other notable changes include the abolition of the entry charge in 2012,allowing listings on alternative markets like AIM,and introducing a three-year grace period for certain structural requirements.The regimes liberalisation continued with the 2019 extension of corporation tax exemption to inclu

89、de sales of shares in qualifying UK property-rich companies(in addition to asset disposals),and the 2023 amendments,which notably removed the mandatory listing requirement for some REITs.21Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform

90、:A Vision for Hong Kong REIT MarketTax Treatment Comparison:REIT and Investor LevelsTable 3:Tax Treatment at REIT LevelHong KongChinese MainlandSingaporeJapanAustraliaUSUKProfits taxWhile the profits derived by REITs are generally tax-exempt,their SPVs remain subject to profits tax at 16.5%(8.25%on

91、assessable profits up to HKD2 million).Tax obligations flow through to investors,but fund managers pay 3%VAT on interest income from loans.Under tax transparency treatment,REITs are not taxed at the entity level but rather at the unitholder level(subject to relevant conditions).While c.34%corporate

92、income tax applies,investor distributions are tax-deductible.Tax obligations flow through to investors.Corporate level taxes apply to undistributed income,with shareholder dividends being tax-deductible.REITs are tax-exempt on rental profits and capital gains realised from qualifying rental business

93、 assets,but generally pay 25%corporation tax on other profits.Tax on capital gain and dividend incomeGenerally none.Foreign-sourced disposal gains received by multinational enterprises are also tax exempt if certain conditions are met.Tax obligations flow through to investors.None.To the extent the

94、REIT is part of a relevant group and does not have sufficient economic substance,capital gains remitted into Singapore from the sale of foreign assets may be subject to corporate income tax.While capital gain is taxed as ordinary income and subject to corporate income tax at about 34%,investor distr

95、ibutions are tax-deductible.Flow through treatment.Subject to corporateincome tax if not distributed.See Profits tax.Withholding tax on distributionsNone.Distributions are generally tax-free,but 10%withholding tax is applied on distributions to non-residents.Distributions are generally tax-free,but

96、a 10%rate is applied on distributions to non-resident non-individuals and qualifying non-resident funds.Withholding tax on listed REIT distributions is levied at 15.315%in general,or 20.315%for distributions to Japanese resident individuals.None for domestic distributions.For foreign distributions,a

97、 15%rate generally applies for Australian net rental income and capital gains on taxable Australian property.Generally no withholding tax for domestic shareholders;30%withholding generally applies on ordinary REIT dividends to foreign shareholders,subject to reduction by treaty.Distributions attribu

98、table to the gain on sale of US real property interests is subject to withholding at reduced capital gains rates;however,certain exceptions may apply.Foreign shareholders that own less than 10%of a publicly traded REIT would treat a gain on sale of US real property.A 20%withholding tax generally app

99、lies to REIT distributions from qualifying rental income and gains.Treaty relief may be available,subject to the investors status.22Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketHong KongChinese Mainl

100、andSingaporeJapanAustraliaUSUKTax on rental incomeRental income from Hong Kong properties directly held by REITs is subject to 15%property tax.SPV-held Hong Kong properties are subject to 16.5%profits tax,while rental income from overseas properties is generally tax-exempt.The project company is gen

101、erally subject to 25%enterprise income tax(EIT),9%value added tax(VAT),12%real estate tax,0.05%stamp duty,and land use tax(based on occupied area and applicable rates).Rental income can enjoy tax transparency treatment.While rental income is taxed as ordinary income and subject to a corporate income

102、 tax rate at c.34%,investor distributions are tax-deductible.Flow through treatment.Rental income is taxed as ordinary income at corporate rates.However,investor distributions can be deducted from taxable income.See Profits tax.Tax on property transfersFor direct property transfers,stamp duty payabl

103、e is up to 4.25%of the consideration.For property transfers via Hong Kong SPV shares,stamp duty payable by both buyer and seller is 0.1%each(total 0.2%)of the consideration.The project company is generally subject to 25%EIT,9%VAT,0.05%stamp duty,and land VAT in the case of direct property transfer.D

104、irect transfers of non-residential properties incur up to 5%buyers stamp duty.Transfers via Singapore company shares that are not considered Property Holding Entities are subject to a 0.2%stamp duty.If concessionary rates are applicable to REITs:Registration tax:1.3%Real estate acquisition tax:1.2%f

105、or land and residential buildings,and 1.6%for non-residential buildings.The tax is based on the fixed asset assessment value rather than the acquisition price.Stamp duties apply,varying by location,property type and scale.Acquisition and registration taxes vary by property location.Normal stamp duty

106、 rates apply to both direct UK property transfers and REIT share transfers.Sales of shares in a non-UK incorporated company(where the share register is held outside of the UK)are not subject to UK stamp taxes.23Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future

107、 Growth through Reform:A Vision for Hong Kong REIT MarketTable 4:Tax Treatment at Investor LevelHong KongChinese MainlandSingaporeJapanAustraliaUSUKDistribution tax for domestic investorsNoneCorporate investors are tax-exempt on REITs dividends.17%corporate tax rate;individuals are exempt,except for

108、 those who derive distributions through partnerships in Singapore or from carrying on trade,business,or professional activities(where individual tax rates apply).Withholding tax(including surtax):generally,20.315%for individuals,and 15.315%for corporate(assuming listed REITs).This is creditable agai

109、nst final tax payable.Tax rates vary based on investors income tax classification.Taxable at prevailing income tax rates:up to 37%forindividuals plus potential additional 3.8%net investment income tax,and 21%for corporate,plus individual and corporate state and local income taxes.UK corporate recipi

110、ents pay 25%tax on property income distributions(PIDs)received from UK REITs.For UK individuals,PIDs are taxed as income at the individuals marginal rate(20%tax is withheld at source).Distribution tax for foreign investorsNone10%withholding tax for foreign companies,20%for foreign individuals.10%wit

111、hholding tax for foreign companies and qualifying foreign funds;foreign individuals are exempt.Generally,15.315%for foreign investors(assuming listed REITs).Withholding tax:15%generally applies for Australian net rental income and capital gains on taxable Australian propertyWithholding tax:30%on gen

112、eral dividends;on capital gain dividends attributable to US real property,20%(25%to the extent of depreciation recapture)to the extent a foreign investor is taxed as an individual or trust for US tax purposes and 21%to the extent a foreign investor is a corporation for US tax purposes.Certain except

113、ions apply.A 20%withholding tax applies to PIDs for both foreign corporate and individual shareholders.Treaty relief may be available,subject to the investors tax status.Tax on transferring REIT shares/unitsStamp duty of 0.2%(0.1%each for buyer and seller)On 11 December 2024,the Legislative Council

114、passed a government bill to waive the stamp duty on the transfers of REIT shares or units.The measure will come into effect on 21 December 2024.Capital gains taxed at investors applicable rate,and stamp duty of 0.05%.No stamp duty.Capital gains taxed at investors applicable rate.Capital gains taxed

115、at investors applicable rate.Capital gains tax exemption may be available for foreign investors on stakes of less than 10%.Capital gains for US shareholders taxed at investors applicable rate.For foreign shareholders,15%withholding tax on gross proceeds for non-US-controlled REITs.Ultimate gain on s

116、ale of non-US controlled REITs taxed at capital gains rates(20%for individuals and 21%for corporations).If a REIT is considered domestically controlled or the foreign shareholder owns less than 10%of a publicly traded REIT,no withholding is applicable provided proper certifications are obtained and

117、ultimate gain is exempt from taxation.Capital gains on disposal of shares in UK REIT taxed at investors applicable rate,and 0.5%stamp duty if transferring shares in a UK-incorporated company.25Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Re

118、form:A Vision for Hong Kong REIT MarketIndustry leaders acknowledge the regulatory evolution while noting areas for enhancement in Hong Kongs REIT framework.Mr Hongchoy noted that while the regulator has implemented significant reforms,including allowing property development and flexibility on geari

119、ng ratios,the multiple regulatory layers continue to create friction.Without offsetting benefits,these restrictions make sponsors reluctant to pursue REIT structures,he said.He highlighted that the current H-REIT framework imposes additional costs through trustee requirements,legal fees and supervis

120、ory expenses,contrasting with markets like the US and Australia where REIT regulations are embedded within existing tax or corporate rules creating a more streamlined approach.He also questioned the classification of REITs as collective investment trusts which requires heightened regulatory supervis

121、ion noting that institutional investors such as income funds and real estate funds,rather than retail investors or high-net-worth individuals,dominate the H-REIT investor base.Mr Leung echoed this sentiment,pointing out that while REITs operate similarly to traditional property investment companies,

122、they face additional regulatory burdens that increase compliance costs and reduce operational effectiveness.He acknowledged that while there has been notable progress compared to the regulatory environment of the past decades,compliance burdens remain particularly challenging for smaller REITs.The i

123、nterviews revealed a call for a philosophical shift in the regulatory approach.Mr Hongchoy suggested moving away from excessive protective measures towards enhanced investor education:Rather than codifying extensive protections,we should focus on enabling investors to make informed decisions.Mr Leun

124、g,meanwhile,added that although the H-REIT governance regime was historically viewed positively for ensuring stable returns,allowing investors greater choice in determining suitable investments might be more appropriate now.The executives emphasised that without greater flexibility,sponsors may simp

125、ly choose alternative structures.From a sponsors perspective,if there is no flexibility,they would rather not form REITs,Mr Hongchoy added.Challenges Ahead26Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT Mar

126、ketIn a wide-ranging interview,Ms Choi of the SFC highlighted REITs distinctive characteristics as an asset class,emphasising their global recognition for providing sustainable,steady returns with relatively low volatility.This stability,she explained,stems largely from the regulatory framework itse

127、lf,which enhances investor confidence and positions REITs as a defensive investment option.Ms Choi emphasised the SFCs proactive approach in developing Hong Kongs REIT market through continuous engagement with industry stakeholders and close monitoring of global regulatory developments.This engageme

128、nt has translated into meaningful reforms,with the SFC demonstrating its responsiveness to market evolution.Notable examples,she said,include the relaxation of MPF investment restrictions,increased gearing limits,and the introduction of a statutory scheme of arrangement and compulsory acquistion mec

129、hanism for REITs to facilitate privatisation and corporate restructuring of REITs changes that reflect the sectors maturing needs.Effective regulation,she added,should enable innovation while preserving the fundamental characteristics that make REITs attractive to investors.Ms Choi also highlighted

130、the SFCs collaborative efforts with the Government to enhance market competitiveness,citing initiatives such as the grant scheme for new REIT listings and stamp duty waivers for REIT unit transfers.On taxation,she noted that while H-REITs are not tax transparent,investors benefit from the absence of

131、 capital gains tax and dividend income tax in tax-transparent jurisdictions.In terms of time to market,she added that approval-in-principle can currently be granted to H-REITs within two months from take-up if the application is in order.The SFCs commitment to market development extends to investor

132、education,she explained.Through industry events,conferences and partnerships with the Investor and Financial Education Council,the SFC actively promotes investors understanding of H-REITs.Ms Choi emphasised the regulators ongoing commitment to engaging with REIT managers,market practitioners and oth

133、er stakeholders to refine the REIT Code and implement measures fostering market growth.Looking ahead,the SFC is advancing what could be a transformative development for Hong Kongs REIT market the inclusion of REITs in the Stock Connect scheme.Ms Choi spoke with enthusiasm about this upcoming milesto

134、ne,explaining how the maturation of the Chinese mainlands REIT market has created an unprecedented opportunity for cross-border synergy.The successful implementation of REIT Connect could catalyse a new era of growth for the H-REIT sector.We envision this as a pivotal development that could attract

135、a diverse array of products and issuers to our market,she said.27Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketBeyond regulatory and tax considerations,industry leaders identified additional challenge

136、s facing the H-REIT market.Mr Hongchoy highlighted a critical gap in investor education,particularly regarding portfolio allocation strategies.Hong Kong investors tend to focus on short-term speculation instead of understanding the role of REITs in providing portfolio stability,he explained,noting t

137、hat REITs serve a distinct function from property developers,but this distinction isnt widely appreciated in terms of asset allocation.Market dynamics are also shaped by broader economic factors.Mr Chak addressed concerns about the Chinese mainlands economic growth,placing current challenges within

138、a historical context.Hong Kongs capital markets have benefited significantly from mainland connections over the past two decades,he noted.Despite current headwinds,he remains optimistic about Hong Kongs position,emphasising its enduring appeal within the Asia-Pacific region.Despite the said challeng

139、es,industry leaders emphasise Hong Kongs enduring advantages as a REIT market,particularly its sophisticated capital markets infrastructure and strategic position within Asia.These fundamental strengths,coupled with ongoing market development initiatives,position Hong Kong to capture emerging opport

140、unities in the REIT landscape.Sophisticated capital market:Hong Kongs position as one of the worlds most liquid markets underpins its appeal as a REIT listing destination.With a market capitalisation of HKD36.9 trillion as of September 2024 and average daily turnover reaching HKD113.3 billion in the

141、 first nine months of the year,the market offers REIT issuers access to substantial capital flows and a diverse investment community.44 Mr Koh,the Singapore-based veteran corporate lawyer,said:Hong Kong has always been one of the deepest capital markets with a lot of liquidity,so sponsors would natu

142、rally be interested in mining that liquidity.Mr Hung of DBS Bank(Hong Kong)also described Hong Kongs deep capital pool and its expanding capacity to channel mainland capital through various connect programmes as a clear advantage for the city.Strategic location:As the dominant gateway to the Chinese

143、 mainland and a premier financial hub,Hong Kong bridges mainland REITs with global capital and international investors with the Chinese real estate market.The Stock Connect scheme exemplifies this connectivity,serving as a vital channel for cross-border investments:in September 2024,average daily tr

144、ading reached HKD61.9 billion in Southbound turnover and RMB129.7 billion in Northbound flows.45 In this context,Mr Lin of Yuexiu REIT emphasised the strategic value of drawing mainland REIT listings to Hong Kong such listings,he believes,would significantly expand market depth,diversity and liquidi

145、ty.Mr Hung,meanwhile,stressed Hong Kongs natural advantage in attracting Chinese assets,given local investors familiarity with the mainland market.He added that securing landmark listings from prominent mainland companies would help establish the city as the preferred financing platform for property

146、 assets from across the border.Simple tax system:Although REIT sponsors face certain tax challenges,industry leaders recognise the broader advantages of Hong Kongs tax framework.Hong Kong has the simplest tax system among major markets in the world,Mr Chak noted,highlighting how this streamlined app

147、roach contrasts favourably with more complex tax regimes elsewhere.Such a predictable tax environment reduces the administrative burden for REITs in the market.Transparent regulatory environment:Despite specific regulatory requirements where some industry players call for changes,they acknowledge Ho

148、ng Kongs broader regulatory framework remains transparent and well-structured.The jurisdiction consistently ranks among top Asian financial centres for market transparency and governance metrics.This clarity extends to REIT operations and provides a clear roadmap for compliance and governance.Hong K

149、ongs Strengths29Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketGovernment support measures Inclusion of REITs in Stock Connect.Following the April 2024 announcement by the China Securities Regulatory C

150、ommission(CSRC),the inclusion of REITs in Stock Connect is progressing through technical preparations.While local regulatory enhancements remain important,Mr Leung of Spring REIT emphasised that improving liquidity is equally crucial for H-REIT market development.He stressed the importance of unders

151、tanding mainland brokers and investors preferences to support their participation in H-REITs.Once REIT Stock Connect is fully operational,he anticipates that marketing efforts to mainland investors will become more straightforward,as the connection will naturally facilitate better understanding of H

152、-REITs among mainland investors.Mr Chui of HKEX highlighted the significant potential of REIT Stock Connect,drawing parallels with ETFs increased trading activity following their inclusion in the scheme.Although REITs currently represent a smaller portion of market turnover,he expects the mutual mar

153、ket access scheme to enhance their liquidity.He also emphasised how the different asset focuses of mainland and Hong Kong REITs would offer investors broader real estate exposure opportunities,potentially leading to enhanced liquidity and valuations,as well as an increase in issuances in both market

154、s.REIT listing expense subsidies.The Hong Kong Governments REIT subsidy scheme,introduced in May 2021 with a HKD8 million funding cap per listing,was in February 2024 extended until 2027.The programme provides a 70%subsidy for eligible professional services expenses,covering legal,accounting and oth

155、er listing-related costs.This incentive is particularly significant for smaller REITs,as it helps reduce the proportionally higher burden of professional service fees that might otherwise deter smaller property portfolios from listing.Stamp duty waiver for transfers of REIT shares or units.On 11 Dec

156、ember 2024,the Legislative Council passed a government bill to waive the stamp duty on the transfers of REIT shares or units.The measure will come into effect on 21 December 2024.Currently,both buyers and sellers pay 0.1%stamp duty on H-REIT transactions,whereas most international markets,including

157、Japan,Singapore and the US,generally do not impose such duties.46 This waiver would align with the Governments commitment to support H-REIT market development.30Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT

158、 MarketOffshore mainland REITsOffshore mainland REITs complement their onshore counterparts by offering greater flexibility to both asset owners and global investors.For mainland property owners,offshore REITs allow securitisation of a broader range of income-generating properties beyond infrastruct

159、ure projects,as markets like Hong Kong impose no specific property-type restrictions.Additionally,the higher gearing limits in offshore markets(50%in Hong Kong,for example)provide mainland REITs with greater financial capacity for property acquisitions.For global investors seeking exposure to mainla

160、nd properties and RMB-denominated dividend streams,offshore mainland REITs present an attractive portfolio diversification option,especially given their limited access to onshore products.As a key offshore financial centre strongly linked to the mainland,the H-REIT market is well-positioned to serve

161、 as a preferred listing venue for Chinese property assets.Recent mainland property market stimulusSince late September this year,the Chinese Government has launched a series of policies aimed at stimulating its real estate sector(through revitalising idle land,cutting mortgage interest rates and rel

162、axing restrictions on housing purchases)and stock market(through injecting additional liquidity).These measures have led to improved market momentum,with property stocks and sales showing positive traction.Given Hong Kongs close economic ties with the Chinese mainland,the Hong Kong-based senior bank

163、er said these supportive measures would benefit both the broader market and REITs specifically,creating favourable conditions for sponsors and investors alike.He added that the anticipated US interest rate cuts could provide an additional tailwind for Hong Kongs REIT sector,depending on the pace and

164、 magnitude of the reductions.32Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketRegulatory changes Expanding legal structure options.Introducing corporate structures for H-REITs,while maintaining asset p

165、rotection through independent custodians,could address current structural limitations and attract more market entrants.This flexibility would also enable participation from institutional investors who face restrictions on trust investments or fund-of-funds structures,ultimately strengthening Hong Ko

166、ngs competitive position against other marketplaces as a preferred REIT domicile.Relaxing the two-year property holding rule.This change would allow H-REITs to respond more swiftly to market dynamics,optimise their portfolios and maximise unitholder value.Such an adjustment would not compromise the

167、fundamental characteristics of H-REITs,as other key principles in the REIT Code,such as the 75%investment in income-generating real estate and 90%dividend distribution requirements,would remain intact.Increasing flexibility on the borrowing threshold.This change could unlock H-REITs growth potential

168、 by allowing REIT managers to determine appropriate gearing levels based on market conditions and lender requirements.The flexibility could be complemented by the introduction of diversified risk management measures,such as interest coverage ratios,investment grading or tiered leverage limits that a

169、ccount for asset quality,diversification and overall financial stability.Allowing for more property development activities.This would enable H-REITs to undertake more substantial property enhancements,capitalise on development opportunities and diversify their portfolios more effectively.Considerati

170、on could be given to raising the property development cap to 25%without requiring unitholder approval at general meetings,allowing more flexible portfolio allocation,provided that development projects are intended for rental income generation.Easing restrictions on financial support offered by H-REI

171、Ts.By allowing H-REITs to provide loans to joint venture entities,senior management for fund subscriptions,and third parties secured by real estate,H-REITs ability to pursue strategic opportunities would be enhanced.Safeguards such as comprehensive risk assessments,robust controls and detailed mitig

172、ation plans could be implemented to mitigate risks.Removing lifespan limit for H-REITs created before 2013.This could enhance their long-term planning capabilities and align older trusts with newer H-REITs and international standards.Tax revisions Introducing tax transparency for REITs.Tax transpare

173、ncy represents a key consideration for REIT conversions.A framework that shifts taxation from the trust to investor level could potentially generate higher yields through more advantageous tax treatment,and offer the possibility of higher valuations for sponsors.This would in turn create an attracti

174、ve economic incentive for new REIT launches and encourage more property acquisitions by existing H-REITs.With the introduction of tax transparency,where income would be taxed at the investor level through withholding tax,Hong Kong could set a competitive withholding tax rate for foreign entities inv

175、esting in REITs,similar to Singapores 10%rate.This would enhance Hong Kongs appeal to international capital.Lowering stamp duty for property injections.To facilitate growth through asset injection and encourage H-REIT establishment,the Government could consider either exempting H-REITs from stamp du

176、ty on property transfers or reducing the rate to 0.2%for direct property transfers into H-REITs,aligning with the rate levied on transactions through SPVs.This could effectively reduce sponsors asset restructuring costs.Singapores experience offers an instructive example:its stamp duty remission pol

177、icy for local property transfers to REITs from 2005 to 2015 helped the industry build a substantial domestic asset base,which subsequently served as a foundation for international expansion.47 Alternatively,Mr Chak of SF REIT suggested that stamp duty collection could be deferred until after success

178、ful listing,rather than requiring significant upfront payment regardless of listing outcome.Foreign-sourced income treatment.Given the Foreign-Sourced Income Exemption(FSIE)regime that came into effect in January 2023,the Government could consider carving out H-REITs from the regimes requirements on

179、 foreign-sourced income,including dividends,interest,disposal gains and intellectual property income.33Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketOther market development initiatives Including REIT

180、s in the HKD-RMB Dual Counter Model.The expansion of dual counter trading to H-REITs would enhance RMB market development by offering investors trading flexibility in both currencies.This would improve market liquidity,reduce counter price gaps and expand capital pools.Together with Stock Connect in

181、clusion,RMB-denominated H-REIT units would become particularly attractive to mainland investors via Southbound trading.As Mr Lin of Yuexiu REIT emphasised,the success of REIT Stock Connect hinges on RMB trading capability,as its absence would expose investors to currency risks.Enhancing listing fram

182、ework.First,streamlining the REIT listing process,such as reducing documentation requirements,could help foster a more active REIT market.Second,authorities may explore establishing a streamlined dual listing framework between Hong Kong,Shanghai and Shenzhen for H-REITs and mainland REITs.Such a fra

183、mework could address company structure requirements and approval processes,with a view to expediting the listing timeline.This mechanism could enhance market development and trading liquidity through wider investor reach.Diversifying market mix.Hong Kongs REIT market currently focuses primarily on t

184、raditional residential and commercial properties,potentially missing opportunities in emerging sectors.To enhance market appeal,industry players should encourage REITs with diverse portfolios spanning healthcare facilities,data centres,infrastructure assets,logistics networks and alternative investm

185、ents.As the worlds second-largest biotech financing centre and a leading data centre hub in Asia,Hong Kong stands ready to bridge financing gaps in these growing sectors through REIT expansion.Strengthening investor education.To address the knowledge gaps impacting REIT investment,market players and

186、 authorities should strengthen investor education and promote awareness through initiatives such as partnerships with investment banks and consulting firms for REIT-focused forums,integration of REIT topics into financial institutions investment seminars and collaboration with financial media platfo

187、rms.These initiatives should focus on REITs unique role in providing stable,income-focused returns as part of a balanced investment strategy for instance,REITs offer institutional investors better time value of money through immediate dividend income and high liquidity,enabling efficient capital dep

188、loyment without the delays of direct property investment.Building a collaborative REIT community.Facilitating a vibrant ecosystem of industry players is crucial for market development.Drawing from Singapores success,Mr Koh highlighted how the countrys REIT association(REITAS),established with suppor

189、t from the local regulator,has fostered a dynamic community through regular industry conferences and events.These gatherings,he noted,bring together hundreds of professionals from across the sector,from REIT managers to service providers and regulators,creating an interconnected network that enhance

190、s market development through knowledge sharing and collaboration.34Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketEndnotes1.Hong Kong Exchanges and Clearing Fact Book 2005,https:/.hk/-/media/hkex-marke

191、t/market-data/statistics/consolidated-reports/hkex-fact-book/hkex-fact-book-2005/fb_2005 2.Hong Kong Exchanges and Clearing Fact Book 2005,https:/.hk/-/media/hkex-market/market-data/statistics/consolidated-reports/hkex-fact-book/hkex-fact-book-2005/fb_2005 3.Developing Hong Kong as a Capital Formati

192、on Centre for Real Estate Investment Trusts,Financial Services Development Council,November 2013,https:/www.fsdc.org.hk/media/qnrpvxsr/04-eng-developing-hk-as-a-capital-formation-centre-for-reits.pdf 4.Spring REIT,http:/ 5.SAMHK Launches the First REITs ETF in Hong Kong,PR Newswire,15 October 2020,h

193、ttps:/ 6.REITWatch:A Monthly Statistical Report on the Real Estate Investment Trust Industry,NAREIT,September 2024,https:/ Securities Exchange,https:/.au/markets/trade-our-cash-market/asx-investment-products-directory/areits;L,https:/ 8.Japan-REIT.com,https:/en.japan- Exchange Group,https:/quote.jpx

194、.co.jp/jpx/template/qsearch.exe?F=tmp%2Fe_reit_list&GO_BEFORE=&BEFORE=0 9.EPRA,https:/ 10.Chartbook:SREITs&Property Trusts 3Q 2024,Singapore Exchange,https:/www.reitas.sg/wp-content/uploads/2024/10/SGX-Research-SREIT-Property-Trusts-Chartbook-Q3.pdf11.Hong Kong Exchanges and Clearing,https:/.hk/Mark

195、et-Data/Securities-Prices/Real-Estate-Investment-Trusts?sc_lang=zh-HK 12.Wind Financial Terminal.13.EPRA,https:/ 14.EPRA,https:/ 15.EPRA,https:/ 16.EPRA,https:/ 17.REITWatch:A Monthly Statistical Report on the Real Estate Investment Trust Industry,NAREIT,September 2024,https:/ Securities Exchange,ht

196、tps:/.au/markets/trade-our-cash-market/asx-investment-products-directory/areits19.EPRA,https:/ Association of Singapore,https:/www.reitas.sg/singapore-reits/overview-of-the-s-reit-industry/;Chartbook:SREITs&Property Trusts 3Q 2024,Singapore Exchange,https:/www.reitas.sg/wp-content/uploads/2024/10/SG

197、X-Research-SREIT-Property-Trusts-Chartbook-Q3.pdf;S-REIT Overview:Recent Investment Flow&Value Investing Trends,Singapore Exchange,14 August 2024,https:/ Report:Development Potential of Offshore Mainland China REITs in Hong Kong,Hong Kong Exchanges and Clearing,October 2023,https:/.hk/-/media/HKEX-M

198、arket/News/Research-Reports/HKEx-Research-Papers/2023/CCEO_ML_REIT_202310_e.pdf;Hong Kong Exchanges and Clearing,https:/.hk/Market-Data/Securities-Prices/Real-Estate-Investment-Trusts?sc_lang=zh-HK23.2023年基金市場回顧（三）：星星之火另類基金市場回顧,Haitong Securities,19 March 2024,https:/ Financial Terminal;Shanghai Sto

199、ck Exchange,http:/ Stock Exchange,https:/ 24.EPRA,https:/ reports of listed H-REITs;Research Report:Development Potential of Offshore Mainland China REITs in Hong Kong,Hong Kong Exchanges and Clearing,October 2023,https:/.hk/-/media/HKEX-Market/News/Research-Reports/HKEx-Research-Papers/2023/CCEO_ML

200、_REIT_202310_e.pdf30.Chartbook:SREITs&Property Trusts 3Q 2024,Singapore Exchange,https:/www.reitas.sg/wp-content/uploads/2024/10/SGX-Research-SREIT-Property-Trusts-Chartbook-Q3.pdf 31.Japan-REIT.com,https:/en.japan- Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Grow

201、th through Reform:A Vision for Hong Kong REIT Market32.Investment Product Summary September 2024,Australian Securities Exchange,https:/.au/content/dam/asx/issuers/asx-investment-products-reports/2024/pdf/asx-investment-products-sep-2024.pdf 33.REITWatch:A Monthly Statistical Report on the Real Estat

202、e Investment Trust Industry,NAREIT,September 2024,https:/ 34.Company reports of listed H-REITs.35.Chartbook:SREITs&Property Trusts 3Q 2024,Singapore Exchange,https:/www.reitas.sg/wp-content/uploads/2024/10/SGX-Research-SREIT-Property-Trusts-Chartbook-Q3.pdf36.Developing Hong Kong as a Capital Format

203、ion Centre for Real Estate Investment Trusts,Financial Services Development Council,November 2013,https:/www.fsdc.org.hk/media/qnrpvxsr/04-eng-developing-hk-as-a-capital-formation-centre-for-reits.pdf37.Code on Real Estate Investment Trusts,SFC,https:/www.sfc.hk/en/Rules-and-standards/Codes-and-guid

204、elines/Codes?rule=Code%20on%20Real%20Estate%20Investment%20Trusts 38.Code on Real Estate Investment Trusts,SFC,https:/www.sfc.hk/en/Rules-and-standards/Codes-and-guidelines/Codes?rule=Code%20on%20Real%20Estate%20Investment%20Trusts 39.Revitalisation of Hong Kongs Real Estate Investment Trusts Market

205、-Promoting Liquidity,Financial Services Development Council,May 2021,https:/www.fsdc.org.hk/media/oaxf4uih/fsdc-paper-no-48_revitalisation-of-hk-s-reits-market_en.pdf 40.Revitalisation of Hong Kongs Real Estate Investment Trusts Market-Promoting Liquidity,Financial Services Development Council,May 2

206、021,https:/www.fsdc.org.hk/media/oaxf4uih/fsdc-paper-no-48_revitalisation-of-hk-s-reits-market_en.pdf41.New Public Fund Depositaries Regime Comes Live on 2 October 2024,SFC,30 September 2024,https:/apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR156 42.Consultation

207、on proposals to(i)introduce a statutory scheme of arrangement and compulsory acquisition mechanism for real estate investment trusts and(ii)enhance the SFO market conduct regime for listed collective investment schemes,SFC,March 2024,https:/apps.sfc.hk/edistributionWeb/api/consultation/openFile?lang

208、=EN&refNo=24CP2 43.關于全面推動基礎設施領域不動產投資信托基金(REITs)項目常態化發行的通知,NDRC,26 July 2024,https:/ Monthly Market Highlights,Hong Kong Exchanges and Clearing,https:/.hk/Market-Data/Statistics/Consolidated-Reports/HKEX-Monthly-Market-Highlights?sc_lang=en 45.HKEX Monthly Market Highlights,Hong Kong Exchanges and Cl

209、earing,https:/.hk/Market-Data/Statistics/Consolidated-Reports/HKEX-Monthly-Market-Highlights?sc_lang=en46.Legislative Council Brief on Stamp Duty Legislation(Miscellaneous Amendments)Bill 2024,Hong Kong Financial Services and the Treasury Bureau,6 November 2024,https:/www.legco.gov.hk/yr2024/english

210、/brief/sfc1271c2024pt1_20241106-e.pdf 47.Budget Statement 2005,Ministry of Finance,Singapore,https:/www.mof.gov.sg/docs/default-source/default-document-library/singapore-budget/budget-archives/2005/fy2005_budget_statement.pdf?sfvrsn=14ab1ff6_2;Singapore boosts REIT tax concessions,Asia Asset Managem

211、ent,25 February 2015,https:/ Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketContributorsDeloitte China and HKREITA gratefully acknowledge the valuable insights contributed by a diverse group of H-REITs,the Secur

212、ities and Futures Commission,Hong Kong Exchanges and Clearing Limited,DBS Bank(Hong Kong),Mr Jerry Koh,and an unnamed Hong Kong-based senior banker.Their perspectives have significantly enriched this publication.Link Asset Management Limited(Link)is a leading global real estate investor and asset ma

213、nager based in Hong Kong.Link manages Link Real Estate Investment Trust(Link REIT),the largest REIT in Asia by market capitalisation.Link REIT has been entirely owned by independent investors since its listing in November 2005 as the first REIT in Hong Kong.Starting as an owner and manager of a port

214、folio of shopping centres and car parks in Hong Kong valued at about HK$33 billion at its IPO,Link transformed into a market leader with a diversified portfolio worth HK$237 billion*through Link REIT,covering retail facilities,car parks,offices and logistics assets spanning Hong Kong,Mainland China,

215、Australias Sydney and Melbourne,Singapore and the UKs London(*as at 30 September 2024).Link seeks to extend its portfolio growth trajectory and grasp expansion opportunities in different markets in pursuit of sustainable development.Link REIT is a constituent of the Hong Kong securities market bench

216、mark Hang Seng Index,as well as a component of the Dow Jones Sustainability Asia Pacific Index,the FTSE4Good Index Series and the Hang Seng Corporate Sustainability Index.Spring Real Estate Investment Trust(Stock Code:1426)is a real estate investment trust and was listed on The Stock Exchange of Hon

217、g Kong Limited in 2013.Spring REITs property portfolio includes:(1)two premium office buildings strategically located in Beijing central business district-China Central Place Office Tower 1 and 2(and the relevant portion of the car park);(2)a landmark shopping mall Huamao Place in Huizhou,located in

218、 Greater Bay Area,which comprises seven-storey shopping mall and 750 carpark spaces;and(3)the UK commercial portfolio comprises 83 separate commercial properties in diverse locations across the UK.George HongchoyExecutive Director and Group CEOLink Asset Management LimitedKevin LeungExecutive Direct

219、or and CEOSpring Asset Management Limited39Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketMr Koh is the Managing Partner of Allen&Gledhill LLP.He has been practising as a corporate lawyer since 1993.Hi

220、s main areas of practice cover investment funds,capital markets and mergers and acquisitions,and he has advised on numerous international and domestic transactions.Mr Koh is the leading authority on REITs and business trusts,and he has been involved in the listing of almost all the REITs and busines

221、s trusts in the Singapore market.He has also been involved in almost all the secondary offerings and convertible bond issues by Singapore REITs and business trusts.He has further advised on a number of REIT listings in Malaysia as international counsel.DBS is a leading financial services group in As

222、ia with a presence in 19 markets.Headquartered and listed in Singapore,DBS is in the three key Asian axes of growth:Greater China,Southeast Asia and South Asia.The banks AA-and Aa1 credit ratings are among the highest in the world.DBS has been named The Worlds Best Bank for Real Estate and the Best

223、Bank for Real Estate in Asia Pacific,Singapore and Hong Kong and China in 2024 by Euromoney.In addition,DBS has been accorded the Safest Bank in Asia award by Global Finance for 16 consecutive years from 2009 to 2024.Sherman HungHead of Large Corporate,Institutional Banking GroupDBS Bank(Hong Kong)J

224、erry KohVeteran corporate lawyer in Singapore specialising in REIT practice40Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketAbout HKREITAHong Kong REITS Association Limited(HKREITA)is a collaborative p

225、latform of the citys real estate investment trusts(REITs)sector.We bring together REIT managers,industry practitioners and professionals working in the REIT sector who share our vision to jointly promote the overall development of the REIT market in Hong Kong.We seek to pool ideas and serve as the r

226、epresentative voice of the REIT sector in Hong Kong,and work closely with policymakers and other stakeholders to boost Hong Kongs position in the global REIT market.We engage in active dialogue with government authorities,regulatory bodies,and industry leaders to address challenges,identify opportun

227、ities,and implement strategies that will drive the growth of the REIT sector.Through these efforts,we strive to create a favourable regulatory and business environment that attracts both local and international investors.In addition to our advocacy work,HKREITA is committed to providing valuable res

228、ources and support to our members.We organise a range of activities,including seminars and networking events,to facilitate knowledge sharing and professional development.These initiatives help our members stay informed about the latest industry trends,regulatory updates and best practices,enabling t

229、hem to make informed decisions and achieve their business objectives.41Unlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketUnlocking Future Growth through Reform:A Vision for Hong Kong REIT MarketContact UsHong Kong Real Estate,Tax and Research SpecialistsDeloitteRegional Real E

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