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1.What is Suntec REIT?
Suntec REIT, or Suntec Real Estate Investment Trust, is a Singapore-based unit
trust established with the investment objective of owning and managing
income-producing real estate which is primarily used for retail and/or office
purposes. Suntec REIT is initially formed to own and manage Suntec City Mall
and the majority of the Suntec City Office properties which are part
Singapore's largest integrated commercial development known as "Suntec City".
2. How do I invest in Suntec REIT?
You can buy units in Suntec REIT, which is listed on the Stock Exchange of
Singapore. For investors outside Singapore, please consult your local
stockbroker who may deal in securities listed in Singapore.
3. Can I use my CPF savings to invest in Suntec REIT?
Units in Suntec REIT can be purchased using CPF funds,
or a combination of CPF funds and cash. CPF members
are allowed to invest up to 35.0% of the Investable
Savings (as defined herein) in their CPF Ordinary
Accounts to purchase or subscribe for units in Suntec
REIT.
4. In what currency is Suntec REIT denominated?
Suntec REIT is denominated in Singapore dollars.
5. Do I need to pay any tax on these cash distributions?
Individuals (irrespective of nationality) who hold units as investment assets
and not through a partnership will receive tax-free cash distributions.
6. What is the reporting and cash distribution frequency of Suntec REIT?
Quarterly basis. Suntec REIT's 1st reporting &
distribution will be for the period from 9 December
2004 to 31 March 2005.
7. What is a Real Estate Investment Trust (REIT)?
A REIT is a company or trust that uses the pooled capital of many investors to
purchase and manage a portfolio of real property assets, predominantly in
income producing real estate. Such real estate, depending on the mandate
of a REIT, could be solely or a combination of retail malls, offices,
industrial properties, business parks, or other real estate assets.
8. What are the benefits of investing in REITs?
- Special tax considerations.
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REITs are granted special tax considerations. The Singapore Government
announced in the 2004 Budget on 27 February 2004 that distributions from real
estate investment trusts [that are authorized under section 286 of the SFA.],
and paid to individuals (irrespective of nationality) who hold units in Suntec
REIT as investment assets and not through a partnership, will be exempted from
tax.
- Regular and stable cash distributions.
-
REITs have a fairly reliable income stream from rental collections paid by
tenants bounded by lease agreements with specific durations. Rents collected
from tenants are distributed to investors on a regular basis in the form of
cash distributions. This underpins the relatively regular and stable cash
distributions that REITs provides unit holders.
- Diversified alternative to direct real estate
investment.
-
REITs generally own multi-property portfolios with a diversified tenant pool.
This provide the average individual investor with the opportunity to invest in
a relatively diversified pool of real estate assets (rather than individually
investing in a specific property) for a modest investment amount.
- Liquid alternative to direct real estate investment.
-
For REITs which are listed, investors can buy or sell units of REITs through
the stock exchanges at current market prices. As liquid investments with
instantaneous pricing, it also allows investors to quickly increase or decrease
their exposure to real assets with ease.
- Capital appreciation potential.
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They provide ongoing distributions along with the potential for long-term
capital gains through price appreciation.
- Professional Management.
Publicly-traded REITs are generally managed by independent, professional and
experienced fund/property management companies who would be subject to
regulatory oversight and the scrutiny/discipline of the capital market.
9. What may affect the price of the units in the REIT, and the income from
them?
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Economic factors
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Real estate market condition (including increased competition in the real
estate market)
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Fall in rental income
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Increase in interest rate
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Increases in expenses
- Physical damage to properties owned by REIT due to wear & tear, and
disasters
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Government and public policy changes
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Laws and taxation changes relating to REITs or property sector
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Any other factors affecting returns from underlying assets held by REIT
In addition, refer to the "Risk Factors" section in the Prospectus for more
details on the risks involved in investing in Suntec REIT.
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