Beyond REITs: Accessing Private Real Estate Debt Deals in Singapore

Real Estate Investment Trust (REITs) are synonymous with the investment environment of Singapore. They have long been a staple of income generating portfolios, and a supposedly easy way to get exposure to real estate. But to the advanced investor, the family offices, HNWIs, and institutional actors, the pursuit of better risk-adjusted returns is taking them out of REITs.

The instability of the public markets and the hunt to find stable, uncorrelated interest rates has revealed a strong alternative; the private real estate debt. It is an exclusive chance to become the bank of the property developments and purchases with strong competitive advantages to regular equity possession. This paper is your roadmap to these unique offers in the vibrant Singapore market.

Why Look Beyond REITs? Understanding the Limitations

REITs are an excellent retail investment vehicle, but they come with inherent limitations that can hinder optimal performance for large-scale portfolios:

• Market Correlation: REITs that are publicly traded are strongly related to the volatility of the stock market. Even with a well-endowed underlying asset, a REIT can experience a crashing share price even when the market is performing poorly.

• Regulatory Constraints: REITs are under stringent regulations. Most importantly, they have less flexibility because of the amount of debt that they can have.

• Distraction from Core Operations: Handling in the market, shareholders relations, and dividend policies may take focus away of the main business of management and acquisition of quality real estates.

• Limited Access to Top-Tier Deals: The majority of the most profitable real estate financing deals are usually private deals and are concluded off-market and only available to an exclusive group of institutional lenders, and not the general public.

The Private Real Estate Debt Advantage

The private real estate debt is the provision of funds to owners or developers of property with the property as security. This places the lender in a high-rank, secured capital structure, a completely different and in many situations safer offer than an equity (such as REIT shares).

Key Benefits for the Sophisticated Investor:

1. Seniority & Security: Since you are a debt provider, your money is secured by first-charge mortgage on the physical asset. This gives it a huge safety net against equity holders.

2. Predictable, Stable Income: Loans are sources of returns that come in the form of regular and fixed interests. This forms a fixed flow of income which is not sensitive to the rental fluctuations which REITs undergo.

3. Lower Volatility: These are not traded in the market and since they are in the form of private loans, their value is not affected by the daily market mood. This will minimize portfolio volatility and be a real diversification.

4. Inflation Hedging: The floating rate loans can be adjusted to the market rates and this provides a natural hedge against inflation.

5. Potential for Enhanced Returns: The investors can often charge high interest rates by offering much needed funding to projects that are either too niche or complex to be funded by other banks.

How to Access Private Real Estate Debt Deals in Singapore

Gaining entry to this exclusive arena requires the right approach and partners. Here’s how sophisticated investors can participate:

• Private Credit Funds: Specialized funds, such as those accessed through Ascendant Globalcredit Group, draw in capital via investors with the aim of initiating and overseeing a diversified portfolio of private real estate mortgages. This could provide immediate diversification and professional management.

• Direct Syndications: In cases of larger ticket sizes, it is possible to club together investors to finance one, large loan opportunity, frequently arranged by an arranger.

• Platforms & Clubs: There are (some) digital platforms and some private investment clubs that are starting to provide access to pre-vetted real estate debt deals, but strict due diligence is most important.

The trick is to collaborate with an asset manager whose track record is good with strong origination networks, stringent underwriting and risk management procedures.

Conclusion: Elevating Your Portfolio with Private Credit

While S-REITs will always have a place in a diversified portfolio, the truly discerning investor looks beyond REITs. Accessing private real estate debt deals in Singapore offers a path to de-risked, stable, and potentially enhanced yields that are decoupled from the daily noise of the public markets.

It represents a shift from being a passive shareholder to an active financier—a role that commands seniority, security, and consistent returns. For family offices and HNWIs in Singapore and across Southeast Asia, private real estate debt is not just an alternative; it is an essential component of a modern, sophisticated wealth strategy.

Navigating this exclusive landscape, however, requires the right connections and expertise. This is where Ascendant Global Credit Group provides unparalleled value. We are a premier financial introducer network, acting as a crucial bridge between sophisticated investors like you and top-tier institutional-grade private credit opportunities.

How We Help You Access These Exclusive Deals:

• Curated Access: We leverage our extensive network to identify and vet high-caliber private real estate debt deals that are typically inaccessible to individual investors.

• Diligence & Analysis: Our team conducts rigorous due diligence, analyzing the underlying asset, sponsorship, and deal structure to help ensure alignment with your risk-return profile.

• Strategic Introduction: We facilitate direct introductions to established fund managers and originators, connecting you with the right partners to execute these sophisticated strategies efficiently.

Ready to explore beyond public markets? Contact Ascendant Global Credit Group to discover how our introducer network can be your gateway to the compelling world of private credit and help you build a stronger, more resilient portfolio.

• What is the debt limit for REITs in Singapore?

  In Singapore, the Monetary Authority (MAS) controls the ceiling of total borrowings of a REIT to be not more than 50% of the deposited value of the property. It is one of the prime regulatory ratios that are meant to restrict risk but the same restricts the opportunity to leverage aggressively on a REIT.

• Can REITs provide debt on real estate?

  Typically, no. REIT does not operate as a lender, its main business is to acquire and manage income-generating property. They are organized in such a way that they are not for debt provision, but equity ownership.

• Why are Singapore REITs not doing well?

  High interest rates are headwinds to S-REITs that raise their borrowing costs and squeeze profitability. They are also prone to uncertainty in a global economy and market mood, and therefore price volatility that is not necessarily an indication of the underlying effect of the assets.

• What is the largest REIT in Singapore?

  As of the latest data, CapitaLand Integrated Commercial Trust (CICT) is often cited as the largest REIT in Singapore by market capitalization, with a diverse portfolio of prime retail and office properties.