Asian REITs continued to recover in the second half of 2009 as the stock markets in Asia improved overall and conditions in the credit market became more relaxed. According to CBRE Research Asia, the total market capitalisation of Asian REITs rose 17.6% in the second half and 34.5% for the whole of 2009 thanks to the recovery in prices and the issuance of new shares.

The market size of Asian REITs has yet to recover to pre-crisis levels, with their market capitalisation as of the end of 2009 still 17.4% lower than that recorded at year end 2007.

The second half of 2009 saw saw a rise in corporate activity in the Asian REIT market, mostly involving mergers and consolidation or refinancing.

In Japan, four mergers involving JREITs were announced following revisions to the tax code that clarified the definition of distributable profit, thereby clearing a former obstacle to acquisition or consolidation.

In Singapore, Australia- based investor AMP Capital acquired a 19.2% stake in MacarthurCook Industrial REIT (subsequently renamed AIMS AMP Capital Industrial REIT) and a 50% holding in the REIT’s management company for $54.1 million. The portfolio of MacarthurCook Industrial REIT was valued at approximately $494 million as of 30 September 2009, reflecting a substantial discount on the acquisition price.

REITs in Singapore also saw a flurry of fund raising activity via the placement of new units and rights issues.

Through the private placement of new shares, Suntec REIT raised gross proceeds of $153 million at S$1.19 per unit while Ascendas REIT raised $301.6 million at $1.63 per unit.

In December, CapitaMall Trust completed a rights issue at $0.82 each to raise a gross amount of $1.23 billion.

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