Singapore real estate investment trusts (REITs)’ corporate governance improved for second year
Capitaland Commercial Trust and Capitaland Mall Trust named best REITs for governance
Singapore REITs scored a mean index of 78.6, according to the Singapore Governance and Transparency Index (SGTI) 2019.
Out of the 46 listed REITs and business trusts, Capitaland Commercial Trust scored 100.5 to inch its way up to the top spot this year from rank 2 in 2018. Capitaland Mall Trust, last year’s top REIT in the index, fell to second place with a score of 99.5.
Ascott Residence Trust is third with a score of 98, retaining its standing from last year’s index. Capitaland Retail China Trust and Frasers Commercial Trust complete the top five for the year with scores of 96.2 and 91.9 in the index respectively.
Overall, Singapore REITs and business trusts scored an average of 78.6 for 2019, an improvement from their score of 74.5 in 2018.
The scoring framework included two parts for the REITs and business trusts category — the Normalized Base Score and the Trust-Specific Items.
For the Normalized Base Score Segment, REITs and business trusts were graded based on the following: board responsibilities, rights of shareholders, engagement of stakeholders, accountability & audit and disclosure & transparency.
For the Trust-Specific Segment, they were rated based on: structure, leverage, interested person transactions, competency of trust manager and emoluments.
The SGTI was launched introduced in 2016 as a gauge of Singaporean corporates’ best practices and governance landscape. The following year, the index was extended to cover REITs and business trusts.
In 2017, REITs and business trusts scored an average of 60.4.
The index, published annually, is a collaboration between CPA Australia, NUS Business School’s Centre for Governance, Institutions and Organisations (CGIO), and Singapore Institute of Directors (SID).
