Extension of Income tax and GST concessions for 5 years removes lingering uncertainty Income tax and GST concessions have been extended for 5 years to 31 March 2020 to attract REITs listings in Singapore. Stamp duty concessions, however, will be allowed to lapse after 31 March this year. The stamp duty concession, mainly for the purchase of local properties, is applicable only to S-REITs. Business Trusts listed on the SGX, such as Croesus Retail Trust, and Accordia Golf Trust, are not affected by these changes.

While this 3% stamp duty places a slight negative impact to REITs seeking growth through inorganic acquisitions, it is hardly a game changer. Overall policies and tax regime in general remain accommodative to the growth of the S-REIT industry.

In the aftermath of the budget announcement yesterday during trading hours, prices of REIT listings stayed stable and did not show any negative knee -jerk reaction in response to the new measures. We think the extension of the income tax and GST concessions removes any lingering uncertainty in the industry for the past few months and could pave the way for the entry of potential investors who were awaiting more clarity.

We maintain our BUY rating for Cache Logistics Trust (TP $1.34) and ACCUMULATE rating for Frasers Centrepoint Trust (TP $2.14).

Source: Phillip Securities Research - 25 Feb 2015