SINGAPORE, 3 July, 2017
A new set of corporate governance rankings was launched, causing Singapore's real estate investment trusts (Reits) and business trusts (BTs) corporate governance practices and key fundamentals to be scrutinised, assessed and tabulated for the investing public and wider market to see.
The Governance Index For Trusts (GIFT), represents the first time such a comprehensive scoring has been published for the Reits and BTs listed in Singapore.
YTL's Starhill Global Reit took 5th position in the inaugural GIFT scoring a total of 72.5 points in the table of 43 Reits and BTs assessed in this year's index. This ranking is important as Corporate Governance is one of the key sustainability pillars of the YTL Group, alongside Marketplace, Environment, Our People and Community.
Starhill Global Reit invests primarily in real estate used for retail and office purposes, both in Singapore and overseas. Since its listing on the Mainboard of the Singapore Exchange Securities Trading Limited on 20 September 2005, Starhill Global REIT has grown its initial portfolio from interests in two landmark properties on Orchard Road in Singapore to 12 properties in Singapore, Australia,Malaysia, China and Japan, valued at about S$3,136.6 million as at 30 June 2016.
These comprise interests in Wisma Atria and Ngee Ann City on Orchard Road in Singapore; Myer Centre Adelaide,David Jones Building and Plaza Arcade in Australia; Starhill Gallery and Lot 10 Property in Kuala Lumpur, Malaysia; a retail property in Chengdu, China and four properties in the prime areas of Tokyo, Japan. Starhill Global REIT remains focused on sourcing attractive property assets in Singapore and overseas, while driving organic growth from its existing portfolio through proactive leasing efforts and creative asset enhancements. Starhill Global REIT is managed by an external manager, YTL Starhill Global REIT Management Limited. The Manager is a wholly owned subsidiary of YTL Starhill Global REIT Management Holdings Pte. Ltd. which is in turn an indirect subsidiary of YTL Corporation Berhad.
The governance index was developed by well-known corporate governance advocate Prof Mak Yuen Teen, who also came up with the Governance and Transparency Index (GTI) and the Governance Evaluation for Mid- and Small-Caps (GEMS), in collaboration with active investor Chew Yi Hong, and with the support of professional body CPA Australia.
Professor Mak of the National University of Singapore Business School explained that GIFT was developed specifically for listed Reits and BTs - now an important feature of Singapore's capital market as the city-state aspires to be a hub for such listings - and recognises their unique features.
The companies were awarded points to the Reits and BTs in areas of governance such as board matters, remuneration of directors and key management, alignment of incentives and interests, internal and external audit, and communication with unitholders.
In general, Prof Mak and Mr Chew found that Singapore-listed Reits and BTs scored well in having at least 50 per cent of independent directors on the board;
having reputable external auditors and unmodified audit opinions; and were able to communicate well with unitholders.
Points were allocated to business risk, assessed using leverage-related factors and other factors such as lease expiry and income-support arrangements.
Merit and demerit points were then awarded, creating the total score. Merit points were given for practices that Prof Mak and Mr Chew believe Reits and BTs should aspire to adopt, for example, putting trust deeds and loan agreements on their websites.
In an article in the Business Times Singapore, Prof Mak and Mr Chew cited that under other governance matters, one of the key areas they assessed was the working experience of the chief executive officer (CEO), chief financial officer (CFO) and head of Investment or Asset Management in the industry in which the Reit or BT operates.
Tan Boon Gin, chief executive of Singapore Exchange Regulation Pte Ltd (SGX RegCo), SGX's independent regulatory subsidiary, said at the launch of GIFT: "It is my hope that the index will not only increase transparency in this space, but also act as a catalyst for Reits and BTs to benchmark themselves against one another and to raise overall corporate governance standards in the sector."