Champion Reit eyes easing of MPF investment curbs on trusts

A leading Hong Kong real estate investment trust (reit) is urging authorities to ease restrictions on Mandatory Provident Fund investments in the trusts.

Champion Real Estate Investment Trust is calling for the change as the next step to boost the development of reits, following a move by the Securities and Futures Commission to allow the trusts to invest 10 per cent of their local assets in "design and build" properties.

Previously, reits had been excluded from property development as managers of income-generating properties.

Adrian Lee Ching-ming, the chief executive of Eagle Asset Management, which manages Champion Reit, believes that while the rule amendment in July is positive, greater benefits would come from moves that boost the sector's exposure to the retirement savings in the city.

"We are moving in the right direction for the development of reits. In the short run, however, the impact is limited," said Lee, referring to the 10 per cent investment allowance for property development.

"Under the regulations, at least 90 per cent of the income of reits has to be distributed to unit-holders. So reits cannot invest in illiquid assets or assets with longer investment periods."

These constraints suggested property development would not prove a popular investment choice for reits, he said.