SFC consults the public on amendments to Code on Real Estate Investment Trusts

27 Jan 2014



The Securities and Futures Commission (SFC) has today begun a one-month consultation on proposals to amend the Code on Real Estate Investment Trusts (REIT Code) to introduce flexibility in the investment scope of real estate investment trusts (REITs).

The consultation paper’s proposals have been formulated during the past year following the SFC’s meetings with various industry participants and the Committee on REITs. Taking into account the comments received and developments in comparable overseas jurisdictions, the SFC considers that it is an appropriate time to amend the REIT Code.

In essence, the proposals seek to introduce flexibility for REITs to:

"These proposals have taken into account both the protection of investors’ interests and the long-term development of the Hong Kong REIT market which is key to Hong Kong’s continued development as an international premier asset management centre,” said Mr. Ashley Alder, the SFC’s Chief Executive Officer.

The above proposals are subject to relevant restrictions such that a REIT will maintain its profile as primarily a recurrent rental income generating vehicle, and also to ensure transparency of its activities. Details of these restrictions, including maximum thresholds on the investments, disclosure and reporting requirements, are set out in the consultation paper (Note 1).

The public is invited to submit their comments to the SFC on or before 26 February 2014. Written comments may be sent on line via the SFC site (www.sfc.hk), by email to reitsconsultation@sfc.hk, by post or by fax to 2877 0318.

End

Note:

  1. Under the proposals, at least 75% of the gross asset value of a REIT shall be invested in real estate that generates recurrent rental income at all times. In addition, the aggregate investments in property development and related activities are also subject to a maximum threshold limit of 10% of the REIT’s gross asset value. Details of other restrictions and requirements are set out in the consultation paper.


Page last updated : 27 Jan 2014