A real estate investment trust is a listed vehicle that invests in a portfolio of income-generating properties. Rents collected from tenants, less expenses, are distributed on a regular basis to provide stable yields to Unitholders.
- REITs offer stable returns from the rentals collected from the tenants.
- REITs offer tax advantages. For individuals and qualifying Unitholders, distributions from REITs are free of tax at source.
- REITs as a portfolio diversification tool - REITs have a risk profile slightly higher than that of bonds and a return profile slightly lower than that of stocks. REITs offer competitive returns for the risk assumed.
- REITs provide a hedge against inflation. When inflation rises, the value of real estate and real estate securities can be expected to increase as well. REITs thus can be considered as a substitute for a fixed income portfolio during periods of expected and high inflation.
Listed on the Singapore Exchange Securities Trading (SGX-ST) Mainboard on 12 April 2010, ALOG is a Singapore-based REIT which principally invests in income-producing real estate used for logistics purposes in Asia-Pacific, and real estate-related assets. ALOG is managed by ARA LOGOS Logistics Trust Management Limited.
The Trust's portfolio comprises 27 high quality logistics properties located across Singapore and Austrlia, with an aggregate gross floor area ("GFA") of approximately 9.0 million sq ft and an average independent valuation of S$1.26 billion.
For the latest information on ALOG's portfolio, please visit https://www.aralogos-reit.com/overview-portfolio.html
ALOG will make distributions to Unitholders on a quarterly basis, with the amount calculated as at 31 March, 30 June, 30 September and 31 December in each year for the three-month period ending on each of those dates. Under the Trust Deed, the Manager is required to pay distributions no later than 60 days after the end of each distribution period.
The Trust's policy is to distribute at least 90% of its distributable income, if any, to Unitholders. Since listing, the Trust has distributed 100% of its distributable income.
The Trust's financial year end is 31 December.
ALOG trades under the stock code "ARAL.SI" and stock symbol "K2LU".
For more information on its stock price performance, please visit https://investor.aralogos-reit.com/interactive_charts.html
The Trustee and Manager will deduct income tax at the prevailing corporate tax rate (currently at 17%) from the distributions made to Unitholders that are made out of the taxable income of ALOG. This applies unless the beneficial owners are individuals or qualifying Unitholders. In such instances, the Trustee and Manager will make the distributions to such Unitholders without deducting any income tax.
A qualifying Unitholder refers to:
- An individual (including those who purchased Units in the Trust through agent bank or a Supplementary Retirement Scheme ("SRS") operator which act as the individual’s nominee under the Central Provident Fund Investment Scheme or the SRS respectively);
- A tax resident Singapore-incorporated company;
- A non-corporate (excluding partnerships) Singapore constituted or registered entity (e.g. registered charities, town councils, statutory boards, registered co-operative societies and registered trade unions);
- A Singapore branch of a foreign company;
- An international organisation that is exempt from tax on such distributions by reason of an order made under the International Organisations (Immunities and Privileges) Act (Cap. 145);
- A real estate investment trust exchange-traded fund which has been accorded the tax transparency treatment; or
- A nominee who can demonstrate that the Units are held for beneficial owners who fall within the classes of Unitholders listed in (a) to (f) above.
Distributions made to foreign non-individual Unitholders or foreign funds will be subject to a final withholding tax rate of 10% (until 31 December 2025 unless otherwise stated).
The above tax ruling does not apply to gains from the sale of real properties. Such gains, if they are considered as trading gains, are assessable to tax on the Trustee. Where the gains are capital gains, the Trustee will not be assessed to tax and may distribute the capital gains to Unitholders without having to deduct tax at source.
Any distributions made by the Trust to Unitholders out of tax-exempt income and income taxed on the Trustee would not be subject to further Singapore income tax in the hands of all Unitholders, regardless of their corporate or residence status.
Capital distributions are regarded as "return of capital" in the hands of the Unitholders for Singapore tax purposes and are not subject to Singapore income tax. For Unitholders who are liable to Singapore income tax on profits from sale of ALOG Units, the amount of capital distributions will be applied to reduce the cost base of their ALOG Units for Singapore income tax purposes.