Deloitte China and the Hong Kong REITs Association (HKREITA) jointly published a special research report titled "Unlocking Growth Potential - Outlook for Hong Kong's REIT Market," suggesting the introduction of a REIT company structure, flexible development and property holding rules, tax transparency measures, and the reduction of stamp duty on the transfer of REIT properties, which would enhance the attractiveness of the local REIT market.

The honorary founding president and chairman of the association, Wong Kwok Lung, Executive Director of Link Asset Management (00823.HK) and Group CEO, stated that introducing a corporate structure for Hong Kong REITs and maintaining asset protection through independent custodians would provide flexibility and attract institutional investors who are restricted in trust investments.

He pointed out that relaxing the requirement for REITs to hold properties for two years would allow them to respond swiftly to market changes without compromising long-term stability and optimize the management of investment portfolios. Currently, the borrowing limit for Hong Kong REITs is 50% of the total asset value, and the limit for property development projects is 10% of the asset value, which could be raised to 25% if agreed by the fund's unit holders. The association believes that these restrictions hinder Hong Kong REITs' ability to use debt to enhance investor returns.

The honorary founding president of the association, Cheung Tat Keung, Executive Director and CEO of SF REIT (02191.HK), stated that REITs must pay a large amount of stamp duty as upfront costs during asset restructuring before listing, which creates significant resistance for those wishing to enter the market. It is suggested that authorities delay the collection of stamp duty on directly invested properties until after a successful listing, creating attractive economic incentives for REIT sponsors.