The Securities and Futures Commission (SFC) today released consultation conclusions on proposals to provide Hong Kong Real Estate Investment Trusts (REITs) with more flexibility in making investments.
The proposals, which received broad support, will be implemented with some modifications to clarify specific requirements such as those which apply to minority-owned properties.
"These amendments will help maintain the competitiveness of the Hong Kong REITs market and facilitate its long-term growth while ensuring investor protection," said Mr Ashley Alder, the SFC’s Chief Executive Officer.
The positive move of this modernisation contains of the following parts for adoption after the consultation:
(i) allowing REITs to make investments in minority-owned properties subject to various conditions;
(ii) allowing REITs to make investments in property development projects in excess of the existing limit of 10% of gross asset value (GAV) subject to unitholders’ approval and other conditions;
(iii) increasing the borrowing limit for REITs from 45% to 50% of GAV; and
(iv) align the definition of connected persons under the REIT Code with that of the Listing Rules
