REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Tuesday, March 30, 2021

SREITs with Unreleased Distribution Retention

It has almost been a year since MOF, IRAS and MAS announced new measures to provide SREITs with greater flexibility to manage their cash flows and raise funds due to the COVID-19 pandemic. The announcement was made on 16 April 2020, which cover:
1) Leverage limit (gearing ratio) raised from 45% to 50%
2) Defer new minimum interest coverage ratio (ICR) requirement to 1 January 2022 in which requires SREITs to have a minimum ICR of 2.5 times before they are allowed to increase gearing ratio beyond 45%, up to 50%.
3) Extension of the permissible period for distribution of taxable income for up to 12 months from the end of their financial year (FY) 2020 to distribute their taxable income derived in FY2020, to qualify for tax transparency treatment.

On 23 June 2020, MOF and IRAS further extended the permissible period as below:
Due to this extension, SREITs are allowed to temporary retain distributable income for better cashflow management. Some SREITs (e.g. Sabana REIT, ESR-REIT) have already released 100% of retention by 31 December 2020 while there are still some SREITs with unreleased distribution retention. Below is the list for those with unreleased distribution retained in 2020:
* SPH REIT retention is accounted for the amount released as per result @ 29 March 2021

If you find any SREITs that I've missed out or any mistake, please feel free to let me know. In the same time, SREITs result announcement for 1Q 2021 is around the corner, you could refer to SREITs Result Date page in which I would update the result announcement date as and when available.

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