Development limit to be raised to 25%
Development limit for a REIT will be raised to 25 per cent of its deposited property. Currently the limit is set at 10% (see All about REIT - REIT as a Property Developer). To date I think only Ascendas Reit and CapitaMall Trust have ever been involved in property development activities. Their asset values are the highest among the REITs, while for the smaller REITs the 10% will be too low for them to be engaged in property development activities. Raising this limit to 25% might bring about the tipping point for some REITs to engage in development projects as alternative stream of income on top of the rental income.
The consultation paper will be open for comments till 10 November 2014.