What are REITs?
Real Estate Investment Trusts (REITs) are collective investment schemes. A trust is set up to invest in a portfolio of income generating real estate assets such as shopping malls, offices, hotels or serviced apartments. Investors hold units in the trust. The assets are held by a trustee for the benefit of unit holders. The REIT is managed by a REIT manager.
Who can be Manager of listed REITs?
The manager of a listed property fund should be a corporation with a physical office in Singapore, and have minimum shareholders’ funds of S$1 million.
The manager, as well as its chief executive officer, directors and professional employees should meet the fit and proper criteria as set out in the Guidelines on Fit and Proper Criteria issued by the Monetary Authority of Singapore (MAS).
In addition, the manager should: a) have at least five years of experience in managing property funds; b) appoint, with the approval of the trustee, an adviser who has at least five years of experience in investing in or advising on real estate; or c) employ persons who have at least five years of experience in investing in or advising on real estate.
Removal of Manager
A REIT manager may be removed by way of a resolution passed by a simple majority of participants present and voting at a general meeting.
The manager and related parties can vote in respect of the resolution to remove the manager.
The manager may choose to enter into a management agreement with the REIT at the time of listing of the REIT. If there is a management agreement, the agreement may
contain compensation provisions for early termination of the management agreement. The compensation provisions must comply with the requirements of the Code of Collective Investments Schemes issued by the MAS.