In his keynote speech at the REIT Association of Singapore Annual Conference 2025 on 16 September 2025, the Chief Executive Officer (CEO) of the Singapore Exchange Regulation (“SGX RegCo“) Mr Tan Boon Gin (“Mr Tan“) discussed issues affecting the real estate investment trusts (“REITs“) which have received considerable attention in recent news coverage. These concern (i) the Equities Market Review Group (“EMRG“) initiatives and their application to the REIT framework; (ii) a “value unlock” approach within the REIT sector; and (iii) climate reporting.
Below, we summarise the topics addressed and outline possible changes related to the EMRG initiatives that will be presented for public consultation.
Application of Disclosure-Based Regime in the REIT Context
The EMRG has proposed a shift towards a more disclosure-based regime. Mr Tan observed that Singapore currently operates a “disclosure-plus” regime where, in addition to making sure risks are disclosed to investors, the regulator prescribes the measures to be put in place to mitigate the risks to protect investors.
While this “disclosure-plus” regime may have evolved to become overly prescriptive in some instances, Mr Tan highlighted an instance where the product of this regime has given Singapore a commercial advantage where, in the context of REITs, the use of rights of first refusal (“ROFRs“) to resolve conflicts of interests in initial public offerings (“IPOs“) may not be seen as overly prescriptive. Whilst some suggest allowing companies to propose their own conflict solutions measures and leaving it to the market to evaluate the IPO (instead of prescribing the solution for all IPOs), these calls to be less prescriptive about the use of ROFRs have not extended to REITs. The use of ROFRs has its virtues in the REIT framework. This is because conflicts of interest are inherent in the REIT structure as the sponsor may own properties or come across new properties that fall within the REIT’s investment mandate. Retaining ROFRs in this context thus boosts investor confidence that the interests of REIT will be prioritised and ensures a pipeline of assets from the sponsor, thereby contributing to the success of Singapore’s REIT framework.
It was therefore suggested that the ROFR, which has become a competitive advantage of the REIT framework, should be retained for REITs despite us moving towards a disclosure-based regime.
“Value Unlocking” Approach in REIT Sector
Following from the EMRG, the Government has announced the injection of public monies into the market through the Equities Market Development Program. This aims to, among other things, encourage more institutional participation in the market (in particular in the mid- to small-cap companies’ space), and therefore instill market discipline imposed by institutional investors. Institutional investors are expected to engage with the investee companies and push them to improve their performance and deliver greater value to shareholders. In response, the market often rewards those companies by driving up their share prices.
Some existing examples of the “value-unlock” approach within the REIT sector were shared. The example cited was where a real estate company sponsors the establishment of a REIT and injects its real estate properties into this REIT, which is to be listed on the SGX, with benefits to both the sponsor and ultimately the shareholders and unitholders. From the sponsor’s perspective, it allows for the unlocking of the market value of the properties, reduces gearing, recycles capital and frees up debt headroom for growth. From the shareholders’ perspective, there is increased optionality in the market and liquidity, with the option to invest in REITs which provide regular and stable distribution.
In addition, the transformation of a REIT to a stapled security combining the REIT and a Business Trust (“BT“) was highlighted for discussion and cited as an example which allow for potential for growth in addition to the passive income of just the REIT alone. Mr Tan also raised the question of whether Singapore’s REIT framework should itself be modified to inherently accommodate the ability to take on some of the benefits provided by a BT.
Upcoming Publication of Timetable of Expectations for Climate Reporting
SGX RegCo has previously extended timelines for climate disclosures beyond Scope 1 and 2 greenhouse gas emissions, which we discussed in our August 2025 Legal Update titled “Climate Reporting Timelines Extended for Listed Issuers by Tiers from FY 2025, Large Non-Listed Companies to Follow from FY 2030“. The time extensions were given to allow issuers to progressively build up their capabilities so that they can produce quality and accurate reports when the time comes.
To this end, SGX RegCo will set out a timetable of its expectations for climate reporting for issuers, breaking down the climate disclosure requirements and showing how listed issuers can progressively meet these requirements over the extended timeline.
The timetable also demonstrates how SGX RegCo will work with its industry partners to equip issuers with the necessary skills to tackle each challenge one by one, so that they can build block by block towards a quality report. More details will be published following this speech.
Upcoming SGX RegCo Consultations
Mr Tan shared that several public consultations will be launched in the next few months related to the EMRG initiatives. One of the issues that will be raised for feedback concerns Listing Rules disclosure requirements on dividend and investor relations policies and how remuneration should be tied to shareholder value creation. In the REIT context, such requirements could revive the debate on whether sponsor fees should be linked to Deposited Property Value, Net Property Income (NPI) or Distribution Per Unit (DPU).
For more information on the shift towards a more disclosure-based regime, please see our March 2025 Legal Update titled “Measures Introduced to Strengthen Singapore’s Equities Market such as Financial Support, Tax Incentives, and Streamlining Regulatory Framework Towards a More Disclosure-Based Regime“.
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