Overview

On Friday, the Securities and Futures Commission published its consultation paper on proposals to extend the application of the Codes on Takeovers and Mergers and Share Repurchases to SFC-authorised real estate investment trusts. Amendments to the Takeovers Code and the Code on REITs came into effect immediately.

REITs, REIT managers, trustees and unitholders must ensure they are familiar with the rule amendments and observe the Takeovers Code in any future takeover and merger activities involving REITs. In particular, unitholders need to be immediately aware that any increase in their REIT holdings to 30% or more will trigger the mandatory offer requirements set out in the Takeovers Code. Similarly, the Takeovers Code creeper provisions will apply to unitholders holding between 30% and 50% who increase their holding by more than 2% from the lowest percentage in the prior 12-month period.

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