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各國REITs商品之發展現況 姜堯民 政治大學財務管理系副教授 政大商學院信義不動產研究發展中心主任 本講義取材自次級資料，非原始創作，僅當上課講義之用，勿做其他商業使用。
Methodology for Income TrustsCRITERIA USED IN RATING REITS • The seven main criteria factors used in rating REITs are: • (1) Portfolio characteristics; • (2) Asset quality; • (3) Financial flexibility; • (4) Diversification; • (5) Size and market position; and • (6) Sponsorship and governance. • (7) Growth Dominion Bond Rating Service Limited, Canada
PORTFOLIO CHARACTERISTICS • This is the most important criteria and involves evaluating the portfolio for: • Type of portfolio – retail, office, and industrial; • Rent rollovers; • Vacancy rates; • Average rents; • Portfolio location; • Margin performance, overall profitability of the portfolio, and critical mass; • Changing nature of the portfolio, particularly in the 2000-2003 period; and • Performance of the portfolio, past, present, and expected. • Most REITs made aggressive acquisitions in the past two-and-a-half years (2001 to date) and most portfolios are relatively new to the REIT.
Asset Quality • • Asset quality for REITs looks at the age, location, and characteristics of assets. • The lower the capital expenditure of the portfolio, the more is available to distribute to unitholders. • Generally, REITs have excellent assets – with long lives and relatively low capital spending needed to maintain the properties, and as such most cash flow can be distributed to unitholders.
Financial Flexibility • Financial flexibility measures the availability of capital to the trust from sources such as banks, mortgages, and the capital markets. • Financial flexibility includes the capacity to retire maturing debt as it falls due, and overall liquidity. • In addition, three key ratios are used debt-to-capital, cash flow-to-debt, and EBITDA/EBIT interest coverage ratios. • Debt-to-capital is historically in the 55%-65% range for REITs. • Cash flow-to-debt is traditionally 9%-12%. EBITDA/EBIT coverage are traditionally in the 2.00 times-3.00 times range, with EBIT coverage usually 30 basis points behind EBITDA coverage.
Diversification • Diversification is important because the better the diversification, the better the stability of cash flow. • In the REIT area, there are four main types of diversification: (1) by property; (2) asset type (retail, office, and industrial); (3) tenant; and (4) geographic. • REITs have little difficulty attaining property (many different locations) and tenant diversification. • However, concentrations arise geographically and by asset type. • Too much diversification by asset type (retail, office, and industrial) may by itself not be a good thing, since it can lead to lack of focus and lack of critical mass.
Size and Market Position • A REIT may have size, but may lack critical mass in any one of the major product lines (office, retail, and industrial). • Size accomplishes four things for REITs: • − It gives market clout in negotiating rents for large tenants, making acquisitions, etc.; • − It provides better diversification; • − It provides economies of scale; and • − It opens access to more capital as larger companies with investment-grade ratings can more readily access the capital markets or secure mortgages.
SPONSORSHIP AND GOVERNANCE • Sponsorship involves having a large controlling or active shareholder, who can provide management or financial resources to assist a REIT. • For a superior ranking in this rating category, a strong sponsor is generally needed. • Governance involves examination of the management fee, outside directors, relationship with a sponsoring shareholder, and whether management is internal or external. • (Many REITs have a limited internal management team, with outside property management companies handling the day-to-day management.)
Growth • Growth is considered the third most important weighting in the stability rating segment. • Growth is defined to be growth of cash distributions to unitholders on a per unit basis. • Because REITs pay out most cash flow from operations, there is usually little growth potential. • Most REITs issue more equity units to make acquisitions, but the resulting dilution effect neutralizes most of the benefits on a per unit basis. • Only if unusually beneficial acquisitions are made at a below market price, or if there are substantial synergies from an acquisition is growth possible. • DBRS looks at growth from three viewpoints by comparing: • − Per unit income over time; • − Per unit cash available to be distributed; and • − Per unit gross cash distributions. • In most cases, the REITs have shown stable per unit performance. • DBRS measures performance as “moderate” where stable per unit results or slight growth is evident. If per unit performance is shrinking the rating is weak. • DBRS also looks at the relationship between cash available to be paid, and actual cash distributed.
主題 • 美國：大本營 • 澳洲：美國以外地區的最大市場 • 日本：茁壯中 • 新加坡：靈活有彈性 • 香港：The Link. • 其他：零零散散 • 綜合討論
What is a REIT? • A REIT is a company that owns and, in most cases, operates income-producing real estate such as apartments, shopping centers, offices, hotels and warehouses. Some REITs also engage in financing real estate. The shares of a REIT are freely traded, usually on a major stock exchange. • A company that qualifies as a REIT is permitted to deduct dividends paid to its shareholders from its corporate tax bill.
The Evolution of REITs • REITs came into being with the Real Estate Investment Trust tax provisions of 1960. The impetus for REITs was to provide small investors a means for investing in real estate and to provide them a source of income since REIT securities have high dividend yields. • 1986 年的稅法改革允許內部管理。 • 1993 年退休基金對REITs 投資的限制取消。
Key Requirements of US REITs • Asset Test: • At least 75% of a REIT’s asset value must come from real estate, cash, and government securities at the close of each quarter of taxable year • No more than 5% of the value of the assets may consist of the securities of one issuer, and REIT may not own more than 10% of the outstanding shares of one issuer, if those securities are not includable in the 75% test • Income Test: • At least 95% of gross income must come from dividends, interests, rents, or gains from sale of certain assets • No more than 30% of REITs gross income can be derived from sale of real estate held for less than fours years or securities held for less than six months • Distribution Test: • At least 90% of the REIT taxable income must be distributed to shareholders • Stock and Ownership Test: • REIT shares must be transferable and must be held by a minimum of 100 persons • No more than 50% of REIT shares may be held by five or fewer persons
FFO (Funds From Operations”) Start with net income. Then: Add back:Real property depreciation expense. Add back:Preferred stock dividends and distributions to OP unit-holders. Deduct:Net gains from property sales & extraordinary items.
FAD (“Funds Available for Distribution”) Start with FFO. Then: Deduct:Capital improvement expenditures (CI). Deduct:Amortization of debt principle (AMORT). Adjust for:Straight-line rents.
Who Invests in REITs? • Thousands of investors, both U.S. and non-U.S., own shares of REITs. Other typical buyers of REITs are pension funds, endowment funds and foundations, insurance companies, bank trust departments and mutual funds. • Investors typically are attracted to REITs for their high levels of current income and the opportunity for moderate long-term growth. These are the basic characteristics of real estate. In addition, investors looking for ways to diversify their investment portfolios beyond other common stocks as well as bonds are attracted to the unique characteristics of REITs. • REIT shares typically may be purchased on the open market, with no minimum purchase required. Many investors also are choosing to own REITs through mutual funds that specialize in public real estate companies.
REITs offer investors: • Current, stable dividend income; • Dividend growth that has consistently exceeded the rate of consumer price inflation; • High dividend yields; • Liquidity: share of publicly traded REITs are readily converted into cash because they are traded on the major stock exchanges; • Professional management: REIT managers are skilled, experienced real estate professionals; • Portfolio diversification: minimizes risk; • Performance Monitoring: a REIT's performance is monitored on a regular basis by independent directors of the REIT, independent analysts, independent auditors, and the business and financial media. This scrutiny provides the investor a measure of protection and more than one barometer of the REIT's financial condition.
Key Observations • For the 1973 through 1999 history, the NAREIT index of REIT securities delivered “equity-like” performance. In addition, correlations with other asset classes were generally 0.7 or lower, suggesting some diversification benefit. • Mean-variance optimizations based on historical performance and BARRA RogersCasey’s forward looking capital market assumptions suggest that, for an investor holding a well-diversified portfolio, a strategic allocation to REITs is not compelling based purely on long-term risk/return expectations. The case for a strategic allocation is stronger for an investor with constraints or outright prohibitions on illiquid assets and/or equities where REITs could be used as a substitute. • REITs have provided competitive yields versus U.S. equity and fixed income and are expected to continue to do so, based on the requirement that 95% of earnings be paid out as dividends (90% beginning in 2001). This characteristic should be attractive to investors with a preference for income over capital gains.
• REITs, like direct investment in real estate, have demonstrated better inflation- hedging capability than U.S. fixed income and equity. However, because the inflation linkage of REITs (and direct real estate investment) is less explicit than that of inflation-linked bonds, an investor seeking an inflation hedge might prefer ILBs to REITs. • REITs have been, and are expected to continue to be, an effective diversifier of real estate exposure. Returns of REITs and direct investment have not moved in lockstep historically, partly because REITs are daily valued and publicly traded, whereas direct investments are valued less frequently and on an appraisal basis. However, investment in REITs allows greater diversification by property type and by number of investments relative to a direct investment of comparable size. • REITs are certainly more liquid than direct real estate investment, but according to forecast liquidity from BARRA’s Market Impact Model, are expected to be less liquid than U.S. large cap and small cap equity. Interestingly, there are some very liquid REITs. The increased liquidity of REITs relative to direct investment would only be compelling for investors with prohibitions or constraints on illiquid investments.
Umbrella Partnership REITs or UPREITs • The concept of UPREIT • In an UPREIT, the REIT does not directly own the underlying properties • Rather the REIT and other real estate owners own units (operating partnership units or OP units) in a partnership that in turn own the underlying physical properties -- Umbrella Partnerships REITs • OP units are convertible into shares of REIT, offering voting rights and dividends • This complicated arrangement allowed property owners (developers) to “sell” their properties to the REIT without triggering taxable event -- non-tax event
Exhibit 1: Umbrella Partnership REIT Formation REIT Shareholders B has the option to convert OP units to shares of REIT REIT A’s OP units are sold to REIT for cash or shares B A Umbrella Partnership Managed by A (formed by REIT) General Manager of Operating Partnership is REIT Property 1 Property 2 Property 3 Property 4
UPREITs and Market Capitalization • The UPREIT is a form of financial engineering or structured financing • The structure is a tax-deferred mechanism through which real estate developers and other owners transferred properties in the form of a tax-exchange -- effect of low adjusted basis • Since the transaction did not trigger a taxable event the REIT is able to acquire properties at better earning multiples • Conceivably this resulted in shareholder wealth maximization • The development of UPREITs resulted in massive growth in REIT equity market capitalization in 1990s (see Exhibits 2) • These modern REITs feature active management so as to grow cash flows and portfolio size
REITs: Spreading Around the World • REITs and other types of public real estate companies have become increasingly prominent participants in the commercial property business around the world. More and more nations are discovering the benefits of REITs—transparency, liquidity, more permanent management and corporate structures, simpler tax structures, easier access to all forms of capital including unsecured debt, greater overall property market efficiency—and are altering their laws to create REIT-like vehicles to realize these benefits. Recent years have seen Japan, France, Singapore, Korea and Hong Kong join the REIT bandwagon.
Australia • It was only about a decade after REITs were created by Congress in the United States in the 1960s that the Asia Pacific region launched its first REIT (also known as a listed property trust or LPT) - the General Property Trust (GPT) in 1971 in Australia. • Starting with the first LPT in 1971, there are now about 30 LPTs in Australia, with an average value of over US$1 billion, and accounting for some 50% of investment grade stock. The LPT sector has been one of the strongest performing sectors of the Australian Stock Exchange (ASX) since 1994. It continued to outperform the broader All Ordinaries in the year ended the December quarter 2002 with LPTs achieving a total return of 11.0% compared to the All Ordinaries return of -7.2%.
In Australia, LPTs are a well established, mainstream investment vehicle with strong appeal to both institutional and private investors. These investors are attracted by the LPTs strong income flows, tax transparency, availability of information, liquidity and quality real estate product. For REITs or LPTs to succeed in Taiwan, they will need to ensure they address all of these issues. • REITs在澳大利亞被稱為上市地產基金（Listed Property Funds），已有相當長的發展歷史，目前有46家上市地產基金（ALPT），總資產超過450億澳元。
The first property trust listed on the Australian Stock Exchange (ASX) can be traced back to 1971, • Australian LPTs make up 8% of the world’s listed property. • During the 1970s and 1980s, the LPT sector was dominated by diversified LPTs. In December 1991, 40% of the LPTs were sector-specific, and this percentage has increased to about 75% (26 of 35 LPTs) in December 2003 • Since the formalisation of the single responsible entity concept through the legislation of the Managed Investment Act in 1998, more LPTs have adopted stapledsecurities/internally managed structures in recent years.
The capitalization of LPTs represents around 8.5 percent of the Australian stock exchange. The sector is dominated by five LPTs, which together make up around 40 percent of the sector's market capitalization. The top 10 LPTs make up more than 65 percent of the sector. LPTs control nearly half of the institutional quality commercial real estate in Australia. There are 80 listed LPTs and other property firms in Australia, with a total market cap of over $50 billion.
LPTs tend to fund their growth through a combination of debt and equity, including dividend reinvestment plans. Bank credit facilities continue to be a major portion of debt funding, although public debt issuance—predominantly in the domestic market—should increase in importance as consolidation activity raises concentration risk for banks. LPTs are large and regular bond issuers.