Knowledge Hub

Learn the latest industry and regulatory developments from India, Hong Kong, China, and Singapore.

Highlights:

India

• Formation of New SEZ Policy: India Budget 2022
• New Fund Management Regulations Issued for IFSC-GIFT City

China and Hong Kong

• New Acquisitions and Equity Fundraising Guidelines for C-REITs
• New Affordable Rental Housing Guidelines for C-REITs
• Joint Venture Between Originators and Fund Managers
• Further Policy Support for C-REITs

Singapore

• Building Green Data Centres – Singapore Lifts Moratorium on New Data Centres, Introduces Environmental Sustainability Standards
• Additional Buyer's Stamp Duty (ABSD) Imposed on All Transfers of Residential Property into Living Trust
• Proposed Legislation for Compulsory Compliance with Code for Qualifying Retail Premises
• Consultation on Changes to Carbon Pricing Act 2018 to Revise Carbon Tax Regime

By Alton Wong, Executive Director, Co-head of Sustainability Services, Greater China, Cushman & Wakefield

For businesses in carbon-intensive industries, the challenge of reducing Scope 1 emissions (direct emissions from owned or controlled sources) can be great.

For service-based organizations, Scope 1 emissions may represent only a single-digit percentage of their entire carbon output. In these cases, the majority of their emissions are Scope 3 – they originate further up or down their supply chain through the activities of their suppliers.

So how do service businesses, like financial institutions and consultancies, reduce what they cannot control?

REITs and Infrastructure Trusts have been gaining traction across Asia-Pacific. Many countries have begun to test waters by releasing their pioneer REITs. Philippines has launched their pioneer REIT in 2020, alongside UAE that released their first Green REIT, whilst China’s highly anticipated REIT pilot program finally came to fruition in June 2021, with the launch of the retail tranches of its first nine REITs all oversubscribed on its first day. China REITs are currently only backed by infrastructure assets packaged in a mutual fund structure, deliberately picked by authorities to spearhead the country’s recovery from the pandemic.

India made its debut for REITs with Blackstone and Embassy-sponsored Embassy Office Parks REIT getting listed on April 1, 2019 as India’s first Real Estate Investment Trust.

Two other REITs, the Raheja Group-backed Mindspace Business Parks REIT and more recently, Brookfield India REIT, have also debuted on the Indian stock exchanges. Together, these three REITs total approximately USD 7.5 billion of market capitalization and cover 86.0 million square feet of Grade-A commercial office space in India. India’s infrastructure investment trust (InvIT) market is growing leaps and bounds and stands at over USD 10billion and is expected to expand to over US$100 billion in the next five years, according to CRISIL Ratings.

The adoption of REITs will continue to accelerate with momentum in 2022 likely to be sustained by the region’s emerging markets. Thailand has already four in waiting. Philippines unveiled its first REIT at the height of the pandemic last year.

This reference guide covers REITs and Infrastructure Trust regulations and taxation in Australia, China, Hong Kong, India, Japan, and Singapore.

An increasing number of institutions, especially financial institutions, have started to disclose climate-related risks and opportunities in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

MSCI ESG Research LLC data and metrics can be used at the portfolio, sector and security level to support reporting on the four pillars of the TCFD recommendations: governance, strategy, risk management and metrics and targets.

This report was originally published in https://www.msci.com/www/research-paper/tcfd-aligned-climate-risk/03306029396