REIT ASIAPAC
Outlook
THE IMPLICATIONS OF NEW IMPETUS TO REINVIGORATE THE HONG KONG REIT MARKET
While Hong Kong has taken steps to revitalise its REIT market , there ’ s still more to do to catch up with other regional regimes .
Photo by Andres Garcia on Unsplash
By Patrick Ma , Director , Listed Products and Research , Admiral Investment Limited
The Hong Kong REIT market has seen significant events in the past twelve months that have changed the dynamics of the sector .
In December 2020 , the Hong Kong Securities and Futures Commission ( SFC ) amended the Code on Real Estate Investment Trusts ( HK REIT Code ). Among the changes were allowing Hong Kong REITs to invest in minority-owned properties , subject to these investments falling under the “ core ” properties category . Hong Kong REITs can also invest in property development projects beyond the 10 % Gross Asset Value ( GAV ) limit , and finally , the SFC raised the cap on REITs ’ aggregate gearing ratio from 45 % to 50 %.
In May 2021 , the SFC separately announced a fee subsidy scheme to entice REITs to list in Hong Kong . Potential REITs with a minimum market capitalisation of HK $ 1.5 billion ( US $ 193 million ) can claim up to 70 % of their professional fees , subject to a cap of HK $ 8 million per REIT . Also , in May 2021 , the Financial Services Development Council ( FSDC ) proposed including Hong Kong REITs under the Stock Connect schemes . The scheme , which links the Hong Kong stock exchange with the mainland
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