The number of cross-border REITs listed on the Singapore Exchange has increased, further consolidating Singapore’s status as a regional REITs hub. These REITs offer global investors exposure to properties throughout Asia Pacific via the Singapore market, including properties in China, Hong Kong, Australia, Indonesia, Vietnam, Malaysia and Japan. To sharpen Singapore’s edge as an Asian REITs hub, it is crucial for us to maintain a conducive environment both for issuers and for investors. To this end, MAS regularly reviews its regulatory regime to keep pace with market development while providing adequate safeguards for investors and issuers, in close consultation with the industry,. Despite substantial growth in market capitalization of REITs in Asia, from approximately $ billion in 2005 to $ billion in 2006, estimates suggest that the current market only represents 4% of investible-grade real estate in Asia, whereas in Australia estimates lie in the region of 50% to 60%. This suggests immense potential for increased securitization of Asian real estate assets, and for diversification beyond the conventional types of properties. Innovations in property finance The success of our REIT market has also spurred growth in other areas. Take for example our debt market. Singapore-listed REITs have also been large issuers of commercial mortgage-backed securities, contributing 20% of all issuance of mortgage-backed securities in Asia-ex-Japan last year. Indeed, Asia’s largest ever commercial mortgage-backed security was issued jointly by two Singapore REITs – CapitaMall Trust and CapitaCommercial Trust.

Demand for office and retail space is strong. The high hotel occupancy rates have spurred new interest in hotel developments. In private housing, annual take-up of uncompleted residential units has surpassed the previous high in 1994. The Government land sales programme will continue to provide new development opportunities in Singapore. Already, we have seen strong market interest supporting the development of the Marina Bay and Orchard Road areas. With the positive outlook for Singapore and the government’s strategic plans for development of key industries, investments in real estate from foreign investors have substantially increased. Investors in Singapore real estate now come from many countries, namely the U.S., Hong Kong, Australia, Germany, Japan, the Middle East and Indonesia. Singapore as a gateway to property finance Investment opportunities in Asia, including Singapore, have not gone unnoticed by global investors. Property and property-related assets are also gaining popularity with investors seeking high-yielding and predictable returns with exposure to capital gains. Attracted by the region’s rapid economic growth and positive outlook on Asia, global investment funds are increasing their allocation to Asia, specifically in Asian real estate. Singapore can play an important role as a gateway for global investors to access Asian opportunities via our capital markets. As a leading home for global fund managers, total assets under management in Singapore exceed $ billion with over 50% of these funds invested into Asia Pacific. The Singapore Exchange is an established listing venue for regional property companies based in Singapore as well as foreign property developers.