What is a Real Estate Investment Trust (REIT)?
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.
What are the benefits of investing in REIT?
- 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.
What is Cache Logistics Trust ("Cache" or the "Trust")?
Listed on the Singapore Exchange Securities Trading (SGX-ST) Mainboard on 12 April 2010, Cache 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. Cache is managed by ARA-CWT Trust Management (Cache) Limited.
The Trust's initial portfolio comprises six high quality logistics properties ("Initial Portfolio") located in Singapore, with an aggregate gross floor area ("GFA") of approximately 3.9 million sq ft and an average independent valuation of S$729.9 million. Over 97% of the Initial Portfolio's GFA consist of modern ramp-up logistics warehouses, representing approximately 25% market share of ramp-up warehouses in Singapore.
For the latest information on Cache's portfolio, please visit http://www.cache-reit.com/property_overview_of_portfolio.html
How and when will income distribution be made available to Unitholders?
Cache 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.
When is the Trust's financial year end?
The Trust's financial year end is 31 December.
What is Cache's stock code and stock symbol?
Cache trades under the stock code "CACHE" and stock symbol "K2LU".
For more information on its stock price performance, please visit http://cache.listedcompany.com/stock_chart_interactive.html
Is the distribution income from Cache subject to any tax?
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 Cache. 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:
- A tax resident Singapore-incorporated company;
- A non-corporate Singapore constituted or registered entity (eg. registered charities, town councils, statutory boards, registered co-operative societies and registered trade unions);
- A Singapore branch of a foreign company which has presented a letter of approval from the Inland Revenue Authority of Singapore granting a specific waiver from tax deducted at source in respect of distributions from the Trust;
- An agent bank or a Supplementary Retirement Scheme ("SRS") operator who act as nominee for individuals who have purchased Units in the Trust under the Central Provident Fund Investment Scheme or the SRS respectively; or
- A nominee who can demonstrate that the Units are held for beneficial owners who are individuals or who fall within the classes of Unitholders listed in (a) to (c) above.
Distributions made to foreign non-individual Unitholders will be subject to a final withholding tax rate of 10% (until 31 March 2020 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 Trust. Where the gains are capital gains, the Trust 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 taxed income would be exempt from 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.