Mallesons Stephen Jaques has advised the Allco Finance Group on the establishment and listing on the Singapore Exchange of its first Singapore real estate investment trust (REIT). The REIT has a gross asset value of S$698.4 million. Its assets include a 50% interest in the Central Park office building in Perth, a 100% interest in the China Square Central complex in Singapore and an investment in the Allco Wholesale Property Fund which contains significant Australian real property assets.

Mallesons’ team (based in Melbourne and Sydney) assisted the Singapore based underwriters to understand Australia’s real property and stamp duty laws and were involved in the preparation of the REIT prospectus that was lodged with the Monetary Authority of Singapore.

The team included lawyers with expertise in property, taxation, stamp duty, foreign investment, corporate and financing law. Having worked closely with Allco on its Australian property transactions over a sustained period of time, the team made practical use of its in-depth knowledge of Allco’s commercial and financing objectives.

Mallesons has extensive experience in acting on REIT transactions. The firm has been heavily involved in the development of the Australian listed property trust markets since their inception in the 1980s. The firm has actively participated in the development of the Asian REIT market. For instance Mallesons played a lead role lobbying the Hong Kong SFC over several years.

Partner, Andrew Erikson commented “Recent positive regulatory developments in Singapore make it an exciting time for real estate investment trusts. The Allco REIT is the first real estate investment trust of its kind in Singapore with assets in Singapore and Australia, and we expect further growth in cross-border REIT activity.”

Partners Andrew Erikson and John Canning were supported by senior associates Simone Menz and Richard Winter and solicitors Christoph Pippel and Howard Shih.

As well as Allco’s recent REIT, the firm has acted as international counsel on other Singapore REITs including:

• advising two investment banks as underwriters of Mapletree Logistics Trust’s S$243 million initial public offering and placement
• advising Macquarie Bank as financial sponsor to the S$900 million Prime REIT and on its management joint venture with Pacific Star
• advising two investment banks on the S$400 million CapitaMall Trust secondary offering and placement.

Notes to editors

REITs are investment vehicles which hold income-producing real estate. In Hong Kong and Singapore, REITs are typically structured as trusts (like Australia), although a company structure is also possible in Singapore. The main features of a REIT are that it:

• is an entity that acquires property (either a diversified portfolio or one focused on a specific sector, such as offices or shopping centres);
• issues investors with securities that are listed on a stock exchange;
• is typically managed by an external body, a manager, who provides professional management services for the portfolio;
• generally distributes most or all of its gross income, less expenses, to investors, though levels of distribution vary across markets and REITs; and
• typically carries relatively low levels of borrowing.