Why invest in REITs?
S-REITs are class of investments that can be described as a hybrid between bonds and listed equities. They potentially offer both long-term capital appreciation like equities, and a regular income stream like bonds, and can deliver competitive total returns.
It generally costs less to invest in S-REITs than to invest in physical real estate directly.
REITs also allow for portfolio diversification due to their comparatively low correlation with other assets.
Due to the steady dividend income S-REITs typically provide, they are a popular investment product among institutions and individuals who prefer a stable income stream to meet their living expenses.
Shares of publicly listed S-REITs are readily traded on the Singapore stock exchange.
S-REITs are subject to stringent corporate governance requirements and are required to announce material information on SGXNET. Their performance is monitored by several independent analysts and their annual accounts are audited by external auditors.
In Singapore, S-REITs that distribute at least 90% of their taxable specified income in the same year in which the specified income is derived qualify for tax transparency treatment, such that specified income which is distributed to unitholders is not subject to corporate tax at the S-REIT level, and are only taxed (where applicable) at the unitholder level.