SGX to roll out two REIT futures

Both futures are designed to allow broad distribution to US and global institutional investors.

The Singapore Exchange (SGX) will launch the SGX FTSE EPRA Nareit Asia ex-Japan Index Futures and SGX iEdge S-REIT Leaders Index Futures on 24 August, a press release announced.

The FTSE EPRA Nareit Global Real Estate Index series is a global benchmark, with an estimated $466.42b (US$340b) of assets under management (AUM) actively benchmarked or passively tracking the indices. Meanwhile, the iEdge S-REIT Leaders Index claims to be the most liquid index-basket representation of the Singapore REIT (SREIT) market and one of the most widely referenced in SGX’s suite of indices.

Both futures are designed in accordance with Commodity Futures Trading Commission guidelines, which would allow broad distribution to US and global institutional investors.

The listing of the SGX FTSE EPRA Nareit Asia ex-Japan Index Futures and the SGX iEdge S-REIT Leaders Index Futures builds on the forte of the Singapore stock market, following the launch of Singapore Single Stock Futures in June this year.

Singapore is currently the largest REIT market in Asia ex-Japan, comprising 44 REITs and property trusts with a combined market capitalisation of $98b. The market capitalisation of SREITs and property trusts has grown at a compounded annual growth rate of 15% in the last 10 years. Compared to other asset classes, they offer one of the highest dividend yields and lower volatility, with an average dividend yield of 7.1%.