I read with great interest this week’s Edge article the REIT Reform. Apparently MAS is studying the regulation of REITs and there are several proposals being brought up. I believe a few incidents have led to this, such as the acquisition of Ocean Financial Center by Keppel REIT and also the use of internally financed rental support for Capital Commercial Trust’s acquisition of Twenty Anson. The REIT reforms may also try to address the potential conflicts of interest in 2 primary areas.

The Sale of Ocean Financial Center to Keppel REIT by Keppel Land Sparked Off a Huge Debate in REIT Corporate Governance

1. Where the sponsor tries to unload an asset to a REIT at very high prices to lock in supernormal profits. The sponsor in this case also happens to have significant influence over the REIT manager or in certain cases is the REIT manager as well.

2. ...