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Commercial Mortgage Backed Securitization in Singapore. The Challenges Ahead

Author

Listed:
  • Tien Foo Sing
  • Seow Eng Ong
  • Kar Hwa Ng

Abstract

The success of CMBS market in the US and the internationalization of CMBS have brought about significant impact on the real estate financing landscape in many Asian markets. We have seen innovative structuring of real estate financing via the CMBS framework in Singapore through various attempts initiated by REIT. This study conducted a mailed questionnaire exercise to evaluate the feasibility of CMBS market in Singapore, and the results showed that 86% of the respondents felt strongly on the potential of establishing a CMBS market in Singapore. In current excess liquidity condition in the financial market, there may be resistance in banks and finance companies to part their valuable commercial mortgage assets through CMBS. The fear of disrupting the good relationships with their preferred mortgage clients also impedes the sale of the mortgages by the banks. On the demand side, investors demand for better supporting services in default and credit protections, if they were to invest and include CMBS in their portfolio. 83% of the respondents were in favor of setting up a government sponsored SMI to jumpstart the creation of a sustainable CMBS market and facilitate CMBS issues in a big way. The success of CMBS issuance and distribution would provide necessary depth and breadth in the capital markets to position Singapore as a financial hub in the region.

Suggested Citation

  • Tien Foo Sing & Seow Eng Ong & Kar Hwa Ng, 2004. "Commercial Mortgage Backed Securitization in Singapore. The Challenges Ahead," ERES eres2004_207, European Real Estate Society (ERES).
  • Handle: RePEc:arz:wpaper:eres2004_207
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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