Media Releases
Published Date: 28 March 2003

MAS Refines Property Fund Guidelines, Gearing Level Raised to 35%

Singapore, 28 March 2003....The Monetary Authority of Singapore (MAS) today issued revised Property Fund Guidelines to give property funds more flexibility in managing their capital structure and to enhance risk disclosure in the prospectuses of such funds.

2   Under the revised guidelines, a property fund can borrow up to 35% (25% previously) of the fund's deposited property.  Furthermore, a property fund may borrow more than 35% of its deposited property if:

  • All of its borrowings (including new borrowings) are made via borrowings with a credit rating of at least A by Fitch, Inc., Moody's or Standard & Poor's (S&P); or
  • The credit rating of the property fund itself is at least A, as rated by Fitch, Inc, Moody's or S&P.

3   In the area of disclosure, the new guidelines set out examples of risks specific to property funds, including lack of diversification and higher gearing, that should be disclosed in prospectuses.
4   The guidelines build on the recommendation of the Land Working Group of the Economic Review Committee to raise the permitted gearing level to 35%. Borrowings above that threshold will be allowed if property funds maintain minimum ratings. This recognises that a property fund may be able to support a higher level of borrowing and also keep its risk of default in check.

5   In formulating the new guidelines on borrowing and disclosure, MAS considered feedback from its public consultation in December last year.  A copy of the guidelines and a summary of the public consultation are available on the MAS website at