Singapore: Financing The Takeover Of A REIT / Business Trust

Last Updated: 19 July 2017
Article by Liew Kai Zee and Prakash Raja Segaran
Most Read Contributor in Singapore, July 2017

In recent years, there have been several proposed buyout deals involving REITs and Business Trusts, the most recent being the proposed privatisation exercise by Croesus Retail Trust (CRT). Such buyouts typically involve either the purchase of all the units of the trust (as was the case for CRT), or the purchase of all the assets of the trust.1

This note focuses on the financing of the acquisition of units of a REIT or Business trust, and discusses the main acquisition structures and points that a potential lender may wish to consider when funding such a takeover.


General Offer

The Singapore Code on Take-overs and Mergers ("the Code") provides that the units of a REIT or Business Trust (as the case may be) may be acquired by way of a general offer.2

The process is similar to a general offer for shares in a company. It usually starts with the offeror making a public announcement of the offer, followed by the offeror issuing an offer document to the target REIT or Business Trust (as the case may be). After reviewing the offer documents, the relevant manager or trustee-manger would have to circulate an offeree circular containing independent advice to the unitholders of the target REIT or Business Trust (as the case may be), and the unitholders would have a window period to decide whether they would want to accept the offer.

Trust Scheme

The second acquisition structure which the Code provides for is the trust scheme.3 In terms of structure and documentation, the trust scheme is very similar to a scheme of arrangement under the Companies Act.

The trust scheme will require an implementation agreement which will set out the terms and conditions on which the trust scheme will be implemented, and a supplemental trust deed to amend the constitutional documents of the REIT or Business Trust (as the case may be) so as to grant the manager or trustee-manager (as the case may be) the necessary powers to implement the trust scheme.

In terms of internal approvals, a scheme meeting would need to be convened to obtain the approval of the unitholders to amend the constitutional documents of the REIT or Business Trust (as the case may be), as well as to obtain the approval of the unitholders to approve the trust scheme.

In addition to these internal approvals, the trust scheme will need to be sanctioned by the Court under Order 80 of the Rules of Court, Chapter 322, R 5 of Singapore. This is because certain provisions of the Code would need to be waived to facilitate a merger or privatisation via a trust scheme, and the Securities Industry Council would, among other conditions, only grant such waivers if court sanction of the trust scheme has been obtained.


There are a number of potential issues that lenders should consider before extending a bridging loan to an offeror for the purpose of acquiring the units of a REIT or Business Trust (as the case may be).

Minority Interests

Where a general offer structure is adopted, and the offeror does not manage to acquire all the units of the target REIT or Business Trust (as the case may be), there may be a need to consider the interests of the minority unitholders. This is particularly so if the debt is intended to be pushed down from the offeror to the trust level or if the trust is to provide upstream security for the acquisition, since dissenting unitholders may be able to prevent the trustee from borrowing or providing security.

Existing Indebtedness

Where the target REIT or Business Trust (as the case may be) has outstanding debt issuances, the restrictive covenants applicable to those issuances, and the interests of the bondholders, would also have to be considered. Debt instruments which are not fully redeemed may need to be modified post-acquisition, with the consent of the relevant bondholders.

The target REIT or Business Trust (as the case may be) may also have taken out prior financing with other lenders. Similarly, these documents may contain change of control restrictions, triggering defaults or mandatory prepayments, and as such any financing must be timed such that the existing debt is repaid or refinanced on the completion date.

Sufficient Resources

Lenders should also note that an offeror will typically need to show the target REIT or Business Trust (as the case may be) that it has the necessary financial resources to complete the acquisition. The Code requires that for general offers, the offer document shall include an unconditional confirmation from the offeror's banker (or other appropriate third party, such as a financial adviser) that sufficient resources are available to the offeror to satisfy full acceptance of the offer. Accordingly, the terms of the loan documents would need to provide for certainty of funding, such that in the absence of any major default or misrepresentation, the lender is obliged to fund the acquisition where all conditions precedent are met.

Where a lender is required to provide a financial resources confirmation, it should always seek legal advice on the terms of the confirmation and the certain funds clauses in its documentation.

Financial Assistance and Other Restrictions on Security

As with any acquisition loan, there may be potential financial assistance and commercial benefit issues, particularly where security is sought from the target REIT or Business Trust (as the case may be) or the debt is pushed down to the target REIT or Business Trust (as the case may be).

While there have been recent changes to the Companies Act to narrow the scope of the financial assistance prohibition, and the prohibition on financial assistance is found in the Companies Act, and not specifically in the legislation pertaining to REITs or Business Trusts, issues of financial assistance and commercial benefit may still be relevant in the context of acquisition financings of trusts in certain circumstances.

Where the trust involved has subsidiaries incorporated outside Singapore and these subsidiaries provide collateral support for the acquisition loans, then issues of financial assistance, commercial benefit and other local law security and guarantee restrictions would still be relevant.


1. The disposal of assets by Saizen REIT is an example of an asset acquisition of a trust. On 4 March 2016, Saizen REIT completed the disposal of its entire portfolio of real estate assets in Japan to Triangle TMK.

2. As of the date of this note, there has not been any takeover of a trust via a general offer in Singapore.

3. As of the date of this note, there has not been any takeover of a trust via a trust scheme in Singapore. On 28 June 2017, Croesus Retail Trust announced that it is undergoing a proposed privatisation exercise by way of a trust scheme.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.