Contrary to what one may assume, Asian listed property trusts have a strong governance framework that essentially makes them passive ‘rent collection’ vehicles for Tier 1 commercial properties. Singaporean REITs for example have to pay 90% of their income to investors, providing a predictable income stream of around 6% pa. This sector therefore offers investors a lower volatility exposure to the massive growth tailwinds playing out in Asia.

Key points

• Strong governance frameworks underpin Asian REITs, with restrictions on gearing, development activities, or funds management activities, effectively making them pure ‘rent collection’ vehicles.
• Lease terms and covenants are very similar to Australia. Typical tenants would include multi-nationals, big law firms, etc.
• Governance stipulates a 90% income payout ratio in key Asian markets like Singapore, Japan and Hong Kong. This supports a stable yield. Testament to this is that volatility of Asian REITs is lower than that seen in Australia, the US and Europe.
• Exposure to the growth tailwinds of Asia, supported by world-class governance.

Further insights

The APN Asian REIT Fund is an income focused property securities fund that taps into an undiscovered region of opportunities. Find out more