SINGAPORE: Singapore Exchange Regulation (SGX RegCo) and the REIT Association of Singapore (REITAS) have issued a timely reminder to US Real Estate Investment Trusts (REITs) unitholders, The Edge Singapore reports.
Their reminder to US REITs unitholders is clear: submit the necessary US withholding tax forms and certificates “in a timely manner.”
According to the market regulator and REIT association, these forms play a crucial role in ensuring that REIT avoid paying US withholding taxes on their dividend distributions, which have been either suspended or reduced.
In the current challenging US market conditions, preserving cash is paramount for these REITs. By meeting their loan repayment obligations and having the capacity to reinvest in properties, they can weather the storm and continue serving the interests of the REITs and their unitholders.
As SGX RegCo and REITAS stated, unitholders who neglect to do so risk exposing the affected REITs to withholding taxes that would otherwise be avoidable.
“Should a unitholder fail to submit the relevant US withholding tax forms and certificates, the REITs which have suspended or reduced distributions would be exposed to withholding tax that would otherwise not be payable,” the statement read.
Manulife US REIT (MUST) disclosed during its 1HFY2023 results announcement a halt to its half-yearly distributions until Dec 2025 or possibly earlier.
Similarly, Keppel Pacific Oak US REIT (KORE), in its FY2023 results released on Feb 15, declared a suspension of distributions from 2HFY2023 to 2HFY2025.
Prime US REIT, on Feb 22, took a different approach by disbursing only 10% of its distributable income for 2HFY2023 and announcing a 1-for-10 bonus issue.
The forms are to be handed over to stockbrokers or nominee banks upon request. /TISG
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