The Monetary Authority of Singapore (MAS) has introduced new regulations that all Singapore-listed Real Estate Investment Trusts (REITs) must adhere to. A key component of these regulations is a unified leverage limit, capped at 50% for every REIT. Additionally, each REIT is now required to maintain an interest coverage ratio (ICR) of at least 1.5 times consistently. Should a REIT fall below this threshold, it won’t be allowed to take on more debt or engage in further deferred payment agreements, though it can still refinance existing loans.
Furthermore, REITs must conduct and reveal sensitivity analyses. These analyses should explore how fluctuations in EBITDA and interest rates might influence the REITs’ interest coverage ratios. If a REIT’s ICR dips below 1.8 times, the management must act to improve it and provide additional transparency about their corrective measures. Such disclosures are now required to be included in interim financial results and annual reports, starting from the specified financial periods.
