A Brilliant Coup for Singapore

Since its introduction in 2004 as a new business model, the business trust has not created the level of excitement initially envisaged by the authorities. The concept of business trusts was conceived after the success of real estate investment trusts and the idea was to provide investors an alternative option to derive an income yield based on the cash flows generated by assets, without any restrictions on the asset type.

Companies that are expected to securitise their assets via the business trust structure are likely to be asset heavy in nature such as transport and utilities. But despite the efforts in promoting this structure to companies and investors, there has been limited success. Today, you can still count the number of Singapore listed business trusts with your two hands. The three shipping trusts – Pacific Shipping Trust, First Ship Lease and Rickmers Maritime and a couple of infrastructure trusts – CitySpring Infrastructure Trust, K-Green Trust and Macquarie International Infrastructure Fund are among the few business trusts listed on the Singapore Exchange. But all could change for the better if Hutchison Whampoa’s plans to spin off its Southern Chinese port assets go through.

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